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1/ 



96th Congress 
1st Session 



COMMITTEE PRINT 



COSTS OF PRODUCING FEEDER CATTLE IN 

THE UNITED STATES— FINAL 1977, 

PRELIMINARY 1978, AND 

PROJECTIONS 

FOR 1979 



PREPARED BY THE 

ECONOMICS, STATISTICS, 

AXD COOPERATIVES SERVICE 

U.S. DEPARTMENT OF AGRICULTURE 

FOR THE 

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY 

UNITED STATES SENATE 




AUGUST 6, 1979 



Printed for the use of the 
Committee on Agriculture, Nutrition, and Forestry 



47-085 O 



U.S. GOVERNMENT PRINTING OFFICE 
WASHINGTON : 1979 










COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY 



HERMAN E. TALMADGE, Georgia, Chairman 



GEORGE McGOVERN, South Dakota 
WALTER D. HUDDLESTON, Kentucky 
RICHARD B. STONE, Florida 
PATRICK J. LEAHY, Vermont 
EDWARD ZORINSKY, Nebraska 
JOHN MELCHER, Montana 
DONALD W. STEWART, Alabama 
DAVID H. PRYOR, Arkansas 
DAVID L. BO REN, Oklahoma 

Henry J. C asso, Staff Director 

Carl P. Rose, General Counsel 

George S. Dunlop, Minority Staff Director 

(II) 



JESSE HELMS, North Carolina 
MILTON R. YOUNG, North Dakota 
BOB DOLE, Kansas 
S. I. HAYAKAWA, California 
RICHARD G. LUGAR, Indiana 
THAD COCHRAN, Mississippi 
RUDY BOSCHWITZ, Minnesota 
ROGER W. JEPSEN, Iowa 



FOREWORD 



In the Agriculture and Consumer Protection Act of 1973, Congress 
directed the Department of Agriculture to conduct cost of production 
studies for various commodities. 

Factual cost of production information is imperative if Congress 
and the administration are to make informed judgments in matters 
affecting food and agriculture. 

Since 1973, the Department has undertaken a large number of cost 
of production studies that go beyond the specific mandates in the 
1973 act. 

This report, "Costs of Producing Feeder Cattle in the United 
States — Final 1977, Preliminary 1978, and Projections lor 1979," is an 
example of the broader effort by the Department of Agriculture. The 
report is especially pertinent. The beef industry has endured major 
cost and price variations over the last several years. After experiencing 
disastrously low returns over a period of years, beef producers are 
expected to show some returns on investment in the current year, 
according to the study. 

This is welcome news. It must be remembered, however, that part 
of the reason for the improved price and income position arises from 
the fact that a large number of producers liquidated herds or went out 
of business during the past 4 or 5 years. 

This is the first of two studies that will be printed this year regarding 
beef cattle. It addresses the foundation of the beef industn^, the cow- 
calf, and stocker-feeder operations. A forthcoming report will deal with 
the cost of production of fed cattle, or the end product. 

This report is published in the committee's continuing effort to pro- 
vide the best possible cost of production information to all persons 
interested in food and agricultural policy. 

Herman E. Talmadge, Chairman, 
(in) 



Digitized by the Internet Archive 
in 2013 



http://archive.org/details/costproduc61unit 



LETTER OF TRANSMITTAL 



Department of Agriculture, 

Office of the Secretary, 
Washington, D.C., June 8, 1979. 
Hon. Herman E. Talmadge, 
Chairman, Committee on Agriculture, 
Nutrition, and Forestry, 
U.S. Senate, Washington, D.C. 

Dear Mr. Chairman: The Agriculture and Consumer Protection 
Act of 1973 directed the Secretary of Agriculture to conduct cost-of- 
production studies for certain commodities. The Economics, Statistics, 
and Cooperatives Service was delegated the responsibility to carry 
out these studies. 

Recognizing the complexity of making cost estimates and the great 
need of policymakers, farmers, ranchers, and the general public to 
understand as much as possible about cost of production, we have 
designed a program of research that goes well beyond the specific 
mandate of the Congress. This more comprehensive research effort 
has been documented in hearings before the appropriations sub- 
committee for agriculture. The enclosed report "Costs of Producing 
Feeder Cattle in the United States— Final 1977, Preliminary 1978, 
and Projections for 1979," is a product of that overall effort. 

You will notice as you review the report that cattle sale receipts 
fell short of covering shortrun costs in 1977, but increased in 1978 
to provide a return to investment. A return to investment also is 
expected in 1979. These increased returns have already slowed and 
may soon reverse the decline in cattle numbers that has continued 
since 1975. The report contains detailed summaries of costs for the five 
major feeder-cattle producing regions and national average costs. 
Cost estimates are shown by major component for two types of en- 
terprises — cow-calf and stocker-feeder. 

These cost estimates should prove to be of widespread interest to 
the beef cattle and related industries and the consuming public. 
Sincerely, 

Howard W. Hjort, 
Director oj Economics, 
Policy Analysis and Budget. 

Enclosure. 

(V) 



PREFACE 



A comprehensive program of research on costs of production is car- 
ried out by the National Economics Division (NED) of the Econom- 
ics, Statistics, and Cooperatives Service (ESCS), U.S. Department 
of Agriculture (USD A). The work is centered in the agricultural 
policy analysis program area and is coordinated by a cost of produc- 
tion board consisting of program leaders of the commodity groups in 
the division. 

Cost of production estimates for specified commodities were man- 
dated by the Agriculture and Consumer Protection Act of 1973. 
Although such estimates for feeder cattle were not included in that 
mandate, the National Economics Division has undertaken a major 
effort to develop a comprehensive program to improve its data on cost 
of production for all major enterprises. Feeder-cattle production was 
added in 1976, to the list of enterprises for which cost of production 
estimates will be maintained. The first report was issued in June 1978 
(Gustafson, R. A., H. C. Gilliam, Jr., and C. C. Boykin, Jr., "Costs of 
Producing Feeder Cattle in the United States, 1976 — Preliminary 
Estimates," ESCS-25, Economics, Statistics, and Cooperatives Serv- 
ice, U.S. Department of Agriculture, June 1978). 

These estimates of the 1977, 1978, and 1979 costs come from a 
variety of ESCS and USD A sources, but the primary base is a 1976 
survey of 1,999 producers. All data and information were processed and 
evaluated using the Firm Enterprise Data System (FEDS). Numerous 
people in the land-grant universities provided information and re- 
viewed the budgets before they were published. 

There is wide variability in production costs. Costs vary signifi- 
cantly over time, from farm to farm, and across States and regions. 
Thus, while the costs shown here are average estimates, the broad 
range of costs which they encompass should not be overlooked. 

This report was prepared under the direction of Henry C. Gilliam, 
Jr. and Ronald A. Gustafson. ESCS staff contributing include Calvin 
Boykin, Kerry Gee, Gail Garst, Roy N. Van Arsdall, Ronald Krenz, 
Richard Crom, and James Nix. 

(VII) 



SUMMARY 



Shortrun production costs for U.S. cow-calf enterprises increased 
from an average $65.64 per hundredweight of feeder calves and year- 
lings sold in 1977 to $66.56 per hundredweight in 1978. Costs are 
projected to rise to $71.39 in 1979. Cattle sale receipts fell $15.16 
per hundredweight short of covering shortrun costs in 1977, but 
increased enough to provide average returns to investment of $13.10 
per hundredweight in 1978. Returns to investment are projected to be 
$32.45 per hundredweight in 1979. These results have already slowed 
and may soon reverse the decline in cattle numbers that has continued 
since 1975. 

Average costs for Southern Plains stocker-feeder enterprises rose 
from $37.79 per hundredweight of feeder cattle sold in 1977 to $42.79 
in 1978 and are projected to reach $63.10 in 1979. Sales receipts 
exceeded costs in both 1977 and 1978, and provided average returns 
to land and risk of 69 cents and $9.60 per hundredweight, respectively, 
in the 2 years. Returns are projected at $17.05 per hundredweight in 
1979. 

Feeder cattle are produced primarily in two types of enterprises. 
Operators of cow-calf enterprises maintain herds of beef cows to 
produce feeder calves and/or yearlings. Stocker-feeder enterprises 
purchase stocker calves that are then grown, primarily by grazing, to 
weights that facilitate feedlot finishing. 

Total cow-calf nonland costs (all costs except interest on the value 
of land used primarily in cow-calf production) averaged $95.16 per 
hundredweight of feeders sold in 1977, $100.39 per hundredweight in 
1978, and are projected to be $113.01 in 1979. Costs at these levels 
include reserve funds large enough to allow replacement, as needed, 
of all depreciable assets at the price levels for the specified year. 

Cow-calf production costs in 1977 differed greatly by size of enter- 
prise. Total nonland costs declined from $113.07 per hundredweight of 
feeder cattle sold from enterprises with fewer than 100 cows to less 
than half as much in operations with 1,000 or more cows. Most of this 
decline was in noncash costs, as the larger producers used machinery 
and facilities more efficiently and reduced family labor and manage- 
ment inputs. However, total cash, feed, and labor costs also declined 
consistently with increases in enterprise size. 

Cow-calf production costs also differed considerably from region to 
region. Total nonland costs in 1977 ranged from $69.64 per hundred- 
weight of feeder cattle sold in the Great Plains to $1 13.76 in the South- 
east. These costs in 1978, ranged from $76.67 per hundredweight of 
feeder cattle sold in the Great Plains to $119.80 in the Southeast. 
Projections for 1979 indicate little change in these average cost dif- 
ferences among regions. 

Stocker-feeder production costs also differed greatly by size of 
operation in 1977. Total nonland production costs averaged $37.79 per 
hundredweight of feeder cattle sold in stocker-feeder enterprises of 
all sizes combined. However, these costs declined as the size of the 
enterprise increased. 

(VIII) 



CONTENTS 



Page 

Foreword in 

Letter of transmittal v 

Preface vn 

Summary vni 

Introduction 1 

Concepts, procedures, and sources of data 3 

Period covered 5 

Size of feeder-cattle enterprises 6 

Feed 6 

Labor 7 

Buildings, equipment, and machinery 8 

Livestock 9 

Overhead 9 

Management 9 

Interest 10 

Land 10 

Prices 11 

Feeder-cattle production 11 

Manure value 12 

Production costs of cow-calf enterprises 13 

National highlights 13 

Organization of cost data 17 

Changes in cost rates and prices 19 

Investment in facilities and breeding stock 20 

Direct costs 21 

Ownership costs 24 

Other nonland costs 24 

Land ownership costs 25 

Effect of enterprise size on unit costs 27 

Regional differences 35 

Production costs of stocker-feeder enterprises 53 

Highlights 53 

Composition of costs 56 

Effect of enterprise size on unit costs 59 

(IX) 



47-085 0-79 



INTRODUCTION 



Shortrun production costs for U.S. cow-calf and stocker-feeder 
enterprises rose between 1977 and 1978, and are expected to rise 
again in 1979. Cattle sale receipts fell short of covering cow-calf 
shortrun co^ts in 1977, but increased enough in 1978 to provide a 
positive return to investment. Stocker-feeders had a return to invest- 
ment in both years. Both types of feeder-cattle enterprise^ are expected 
to have a greater return to investment in 1979. 

The main objective of this study is to provide national and regional 
estimates of the weighted average costs of producing feeder cattle. 
The data are presented in sufficient detail to provide decisionmakers 
with relevant cost information for the many different planning prob- 
lems that arise. 

The Agriculture and Consumer Protection Act of 1973 directed the 
Secretary of Agriculture to estimate the annual costs of producing 
certain major commodities. 1 Although the cost of producing feeder 
cattle was not included in that mandate, the U.S. Department of 
Agriculture's (USDA) Economic Research Service (now part of the 
Economic-, Statistics, and Cooperatives Service — ESCS) directed in 
1976 that its cost-of-production research cover the co>t of producing 
meat animals, including feeder cattle. Data from a 1976 survey were 
used to estimate the cost of producing feeder cattle. 2 These data are 
used here as the basis for estimating: the cost of producing; feeder 
cattle for 1977, 1978, and 1979. 

A computerized cost-estimating procedure, the Firm Enterprise Data 
Systems (FEDS), wa- implemented in 1973. This >ystem consists of a 
series of computerized enterprise budgets serviced by an aggregation 
program. 3 FEDS is used to update budget costs in the years between 
producer survey-, which are now planned on a 5-year rotational 
schedule that treats different commodities each year to provide data 
to update and supplement the FEDS cost-estimating procedure. 

Feeder-cattle production budgets were developed for 1976 for five 
major cattle-raising regions — North Central. Southeast, Great Plains, 
Southwest, and West (fig. 1). These regions include about 95 percent 
of the Nation's beef cows. Two distinct types of enterprises are con- 
sidered: Cow-calf production, where feeder cattle are raised and sold 
as feeder calves or yearlings; and stocker-feeder production, where 
calves are purchased from cow-calf producers, grazed to increase 
weight, and sold as feeder calves or yearlings. 

1 Public Law 98-86, Sec. 808, 93d Cong.. Agriculture and Consumer Protection Act of 1973. 

J "Costs of Producing Feeder Cattle in the United States— 1976. Preliminary Estimates," ESCS-25. 
Economics, Statistics, and Cooperatives Service. U.S. Department of Agriculture, June 1978. 

3 The FEDS system of budgets and cost-estimating procedures is operated by ESCS research staff sta- 
tioned at Oklahoma Stat? University. FEDS also prepares research budgets that are updated annually. 
The research budgets are developed using similar procedures as for the aggregated budgets included in 
this report, but are estimates for smaller production components. The research budgets in printed form 
are available upon request for specific areas of the country. 

(1) 



2 



Figure 1. Production Regions for Feeder Cattle Cost Analysis 




Shaded areas were" excluded from the survey 



There are substantial differences in costs among sizes and types of 
production systems, with nearly all size and system combinations co- 
existing within each major region. Costs vary significantly over time, 
from farm to farm, and across States and regions. Variability among 
farms is due to many factors. Important ones are differences in size of 
enterprise, system of production, intensity of use of facilities, types of 
feeder cattle produced, and managerial skills of individual producers. 
Volume of production is important, as some operators achieve efficien- 
cies through more intensive use of resources, especially buildings and 
equipment. Thus, while the costs shown here are average estimates, 
the broad range of costs which they encompass should not le over- 
looked. Furthermore, cost estimates in this report reflect the ^ejghted 
averages of actual performance of farmers in producing feeder cattle, 
rather than the recommended production plans issued by many univer- 
sities and other agencies. 

One hundred and fourteen separate cow-calf (107) and stocker- 
feeder (7) budgets were developed, representing enterprises of dif- 
ferent types, sizes, systems of production, and geographical regions. 
Each budget is weighted according to the proportion of total produc- 
tion that it represents; within each region, more emphasis is placed on 
operational differences than on locational differences. 4 

All estimates in this report reflect the costs of ongoing operations 
for the respective years. Further divisions have been made between 
cash and noncash imputs to reflect more accurately the varying eco- 
nomic positions of feeder-cattle enterprises as a part of whole farm or 
ranch businesses. Cost estimates can thus be compared directly for 
any identified situation in 1977, 1978, or 1979, and for most but not all 
categories of costs for 1976, against later years. 



« Cost estimates for 1977 by enterprise are available from FEDS. ESCS, USDA, Oklahoma State Uni- 
versity, Stillwater, Okla. 74074. 



CONCEPTS, PROCEDURES, AND SOURCES OF DATA 



The basic concepts underlying estimates of cost of production and 
the sources of data used to formulate the estimates are closely related. 
Several sources of data have been used in various studies over the 
years to estimate the cost of feeder-cattle production. The two most 
common have been supervised records kept by farmers and ranchers 
and surveys of producers selected at random. The producer survey 
procedure was used in 1976 to get the basic physical data forming the 
foundation of the cost estimates in this report. This survey was de- 
signed to estimate the average cost of production for all producers. 

Cost estimates developed from these two sources of data usually 
differ. The estimates based on farm and ranch records are usually the 
lower of the two. The differences between the two methods are due to 
the different populations of producers, the different methods of cost 
accounting, and the concepts underlying the charging and allocation 
of costs to enterprises in multiple-enterprise firms. 

Recordkeepers, many of whom are in organized groups supervised 
by professionals, have provided an excellent source of cost data for 
many years. The data have a high degree of accuracy, show detailed 
costs of some inputs, provide for comparative enterprise analyses with- 
in firms, reveal trends over time, show size economies, and serve many 
other useful purposes. Further, cost data from farm records are avail- 
able on a continuing basis without the high costs of an extensive 
survey. 

Farm record data have limited applicability, however, when used to 
estimate the average cost of production for all producers in the in- 
dustry. The ability and willingness of farmers and ranchers to keep a 
complete set of records under professional supervision probably reflect 
a higher level of managerial ability than provided by the average pro- 
ducer. Further, such farm and ranch businesses are usually larger than 
average, thus gaining some cost economies, especially in input prices. 

Record data may underestimate annual costs because accelerated 
depreciation rates are often used to take advantage of income tax 
regulations. Thus, enterprises that have been in operation for several 
years may record relatively low ownership costs simply because many 
of the assets still in use have already been depreciated out in the ac- 
counts. Th s is especially true for smaller operations. Further, only 
cash outlays are permissible in establishing the basis for depreciation 
for income tax purposes. Therefore, the substantial amounts of unpaid 
operator and family labor, and sometimes salvage materials, that often 
go into the construction of farm buildings, fencing, and paved lots 
contribute nothing to the investment basis and subsequent annual 
charges for depreciation and interest on investment. Both of these 
features of capital accounts in farm and ranch records tend to under- 
estimate the annual charges compared with the estimates used here. 

(3) 



This analysis counts the full value of assets regardless of source of 
inputs and measures asset life in terms of useful life without regard 
to income tax considerations. 

Enterprise failures may go unrecorded. If a disease seriously im- 
pairs or destroys a feeder-cattle enterprise, the recordkeeping some- 
times also ceases, as the producer sees no further value to the records. 
Aggregations of record results thus may not include failures, though 
they are a necessary part of the industry if average performance is to 
be measured. 

The underlying concept of the cost estimates in this report is that all 
costs of the feeder-cattle enterprise should be identified and estimated 
in full. Therefore, homegrown feed grains (the most salable) are valued 
at the prices the producer could have sold them for on the open market. 
Silage is valued at its grain equivalent plus additional harvesting 
charges. Hay is charged at cost of production for the proportion pro- 
duced on the farm or ranch, and at the average price received by 
farmers for that portion typically purchased or purchased due to 
drought. Pasture is charged at cost of production on the land owned by 
the farm or ranch. Pasture of forage from rented private or public 
land is entered as a cash cost. Labor is priced at the average rate paid 
to hired labor plus social security taxes, even though operator and 
family members supply most of the labor for feeder-cattle raising. A 
management fee also is included. All purchased operating inputs are 
charged at actual costs. 

Even a small feeder-cattle enterprise should not depend upon other 
enterprises to carry all of the general farm overhead costs. Therefore, 
all indirect costs are estimated and a share charged to the feeder-cattle 
enterprise so that it carries a proportionate share of operating the entire 
farm business. These costs are apportioned according to the total 
dollar sales attributed to each enterprise on the farm or ranch. 

Estimated costs presented in this analysis are also increased by a 
break with tradition in the method of computing the ownership costs 
of depreciable assets. Rather than charge depreciation based on 
original investments, a replacement reserve is included based on 
current reproduction or replacement costs. The resulting cost estimates 
center on whether the enterprise can be continued in the future, not 
whether the original investment is being recaptured from returns 
(which is moot in any case once capital has been sunk in an operation). 

Historically, feeder-cattle enterprises have been part of multiple- 
enterprise farms and often only a small part, particularly in the major 
crop-producing areas. This has caused analysts to emphasize the direct 
costs of feeder-cattle production while excluding some indirect costs or 
relegating them to the residual claimant category. The philosophy in 
this report, however, is that all enterprises should bear a proportionate 
share of the costs of operating the farm or ranch business of which they 
are a part. Estimates of the costs of producing feeder cattle, for in- 
stance, include a charge for management and a share of the general 
farm overhead costs. A land charge on the owned land allocated to the 
feeder-cattle enterprise is considered separately. Some cost estimates 
are lower than those in this report because they omit on^ or more of 
these cost items. 

Estimates in this report reflect the average performance of all feeder- 
rat tie producers. They include all costs of production, both direct and 



indirect, but in sufficient detail so that any particular item can be 
removed if it is not relevant to the decision under consideration. 

To prepare the estimates for 1977, 1978, and 1979, ESCS used data 
from the 1976 survey on the types of machinery, equipment, and 
facilities employed in feeder-cattle production in the various regions 
and enterprises of different sizes. Different rates of production per- 
formance and the costs reported for veterinary and medical expenses 
and other production items also are used. These costs and production 
input-output coefficients and returns from sales of feeder cattle were 
updated for 1977 and 1978 and projected for 1979 using prices and 
indexes reported by the Statistical Reporting Service (now a part of 
ESCS) and projections made in the ESCS Outlook and Situation 
Information System (OASIS). 5 All costs and prices reflect averages 
for States or regions weighted according to the volume of feeder-cattle 
production represented. Thus, economies or diseconomies of size in 
purchasing and marketing are not reflected for large- (or small-) 
volume producers. 

The budget sizes for cow-calf production, based on the number of 
beef cows and replacement heifers, are: Less than 100, 100 to 199, 
200 to 499, 500 to 999, and 1,000 head or more. The budget sizes for 
stocker-feeder production, based on stockers purchased, are: 200 to 
499, 500 to 999, and 1,000 head or more. Weighted aggregates of the 
enterprise budgets are used to estimate the regional and national 
average costs and returns of producing feeder cattle in 1977, 1978, 
and 1979 for each of the two types of feeder-cattle enterprises. Aggrega- 
tion weights assigned to the budgets are derived from cattle distribu- 
tion data provided by the 1974 Census of Agriculture and the 1976 
producer survey, adjusted to reflect the higher proportion of feeder 
cattle estimated to be produced in larger enterprises in 1977 and 1978 
than in earlier years. 

The costs are presented for three decision settings based on the 
economic importance of the feeder-cattle enterprise to the total farm 
business and on the length of the planning period. The estimated total 
costs of production are further divided between costs that must be 
covered each year by returns from feeder-cattle sales for continued 
production to be a profitable decision and costs that are postponable. 

PERIOD COVERED 

All costs and returns estimates use prices for 1977, 1978, or projected 
for 1979, except for the costs of facilities. Facility costs reflect the es- 
timated historical investment cost for computation of interest and 
taxes; however, current-year construction or replacement values are 
used to estimate repair costs and replacement reserves. Average ages 
are 4 years for machinery and from 10 to 25 years for buildings; 
the larger enterprises generally had the newer buildings. Unless other- 
wise specified, prices are reported for the given calendar year. Stocker- 
feeder enterprises include only sales occurring during that year. 
Stocker cattle sold as feeder cattle in 1 year were purchased during the 
last quarter of the previous year. Associated costs for stocker-feeder 

* The Outlook and Situation Information System (OASIS) is a means of reporting the latest economic 
information on the agricultural sector to public and private decisionmakers. Projections and data bases 
are updated as new information becomes available. As an aid to meat animals cost-of-production data 
users, a partial OASIS updating will be available in the August and October issues of "Livestock and Meat 
Situation," Economics Statistics and Cooperatives Service, U.S. Department of Agriculture. 



6 

enterprises cover the production period during which the stocker 
cattle were grazed on pasture. 

SIZE OF FEEDER-CATTLE ENTERPRISES 

Cow-calf production has been shifting toward enterprises of larger 
size, although a large number of operators with small herds remains. 
The number of farms and ranches with beef cows decreased 45 per- 
cent between 1964 and 1974 (the latest census year), while the number 
of beef cows increased 9 percent. During that period, the number of 
farms and ranches with fewer than 20 cows declined 70 percent; the 
number of cows in such small herds declined 59 percent. Both farms and 
ranches reporting beef cows and the number of cows reported in- 
creased for all other size groups. Increases were greatest on farms and 
ranches with 100 or more cows. Still, nearly 89 percent of the farms 
and ranches with beef cows in 1974 had fewer than 100 cows, and 
they accounted for 52 percent of the national beef -cow herd. Less 
than 4 percent of the ranches had more than 200 cows, but those firms 
had 30 percent of the total cow herd. 

Expansion in the larger size groups is expected to continue. Despite 
the rapid liquidation of the beef -cow herd in 1977 and 1978, the 
January 1, 1979, cattle inventory showed an expansion of the number 
of farms and ranches with 500 head of cattle or more. The next census 
data should indicate increasing levels of production in the larger size 
groups and, consequently, greater weighting factors on the larger 
budgets. As the size of enterprise grows, the aggregate costs for all 
enterprises combined will decline slightly. 

The proportion of feeder cattle produced in the larger enterprises is 
increasing in all regions. Between 1964 and 1974, the North Central 
region had the largest percentage increase in herds of 100 beef cows 
or more, in both number of farms and ranches and in the number of 
cows in the herd. The greatest growth for all regions was in herds of 100 
to 199 head. Growth in the Northern Plains and the West was greatest 
in herds of 500 to 999 and 1,000 or more cows. 

Even with such substantial shifts, U.S. feeder-cattle production in 
1979 is characterized by relatively small enterprises, averaging about 
40 head. Relatively few firms have large feeder-cattle enterprises. 
The cattle-raising enterprise is supplementary to crop production on 
many farms and ranches. Enterprise budgets, weighted according to 
the proportion of cow-calf production represented by each, therefore 
cover a range in herd sizes from less than 100 head to 1,000 or more 
cows. 

Data are not available on size changes in stocker-feeder enterprises, 
but a trend to larger herds is probably occurring. 

FEED 

Producers responding to the 1976 survey, in addition to reporting 
the liveweight of feeder calves produced, also reported the quantities of 
pasture, range, and crop residues grazed and the quantities of other 
feedstuff's fed. Data from the survey form the basis of the feed inputs 
used in the cost estimates that follow. The sources of feed and forage 
and their use varied among types of enterprises and among regions. 



Protein supplement, commercial concentrates, and salt and minerals 
are valued at the average prices paid by producers in the specific 
month and area of use. Grains, whether produced or purchased, are 
valued at the price received by producers as reported in " Agricultural 
Prices." 6 Silage is priced similarly, based on the grain equivalence 
plus additional costs of harvesting silage rather than grain. 

Hay is priced at the cost of production, exclusive of land charges, 
for the proportion produced and fed on land operated by the feeder- 
cattle producer. The proportion of hay purchased is priced at the 
weighted average price received by farmers. Regional differences in the 
proportions of hay produced on farm and that purchased are based on 
data from the 1976 survey, adjusted to reflect larger quantities fed 
due to harsh weather and larger quantities purchased due to drought. 

Separate enterprise budgets were constructed for hay in areas where 
hay was produced and fed on the farm or ranch. The charges for the 
homegrown hay represent total production costs minus real estate 
taxes and interest. Real estate taxes are listed separately in the feeder- 
cattle budgets, and interest on the estimated value of land, including 
the proportion used to produce hay, is discussed in a separate section. 

Survey data also were used to construct pasture and range enterprise 
budgets. These budgets were used to estimate the costs of seed, 
fertilizer, herbicides, and other forage improvement practices included 
in the cost of grazing crops charged to the cattle enterprise. Improve- 
ment costs were charged on only the proportions of range or pasture 
actually treated, but weighted average improvement costs were 
allocated, where applicable, to the entire acreage associated with each 
feeder-cattle budget. Weighted average costs per acre were computed 
by dividing the total costs of improvements to each type of pasture 
or range — reported by survey respondents — by the total acreage of that 
type of pasture or range used in raising the feeder cattle represented in 
each budget. 

Wheat raised for grain but also grazed by feeder cattle is charged to 
the cattle enterprise at the lease rate for wheat pasture in the area. The 
grazing value of crop residue following harvest is allocated to the cattle 
enterprise at no charge other than the costs of temporary fences and 
livestock water in the crop fields. 

Use of average feed input prices, especially for commercial supple- 
ments and protein meal, does not reflect the quantity discounts often 
possible with large purchases. The unit prices for feedstuffs, however, 
may be affected more by the size of the total farm business and the 
volume of purchased inputs for all purposes than volume of feed 
purchases alone. 

LABOR 

Labor charged to feeder-cattle production is the average of hours 
reported by producers in the 1976 survey. Labor inputs per unit of 
production were in line with labor expected for feeder-cattle production 
in larger enterprises. Operators with small herds had higher labor in- 
puts per unit of production ; that reflects a combination of a low level 
of mechanization, inefficient organization, and use of more time than 
was probably necessary. Some producers may have allocated more 



'"Agricultural Prices," Crop Reporting Board, Economics, Statistics, and Cooperatives Service, U.S. 
Department of Agriculture. 



47-085 0-79-3 



8 

labor than necessary among the various enterprises in the farm and 
ranch business in order to show a full employment level. Regardless of 
the reason, high labor use contributed substantially to the higher cost 
of producing feeder cattle in small enterprises. 

Most of the labor connected with feeder-cattle production is pro- 
vided by the operator and other family members. Nationally, only 21 
percent of the total labor input in cow-calf production was estimated 
to be hired labor in 1977, compared with 28 percent for stocker-feeder 
operations. These percentages reflect less total labor per cow, but more 
hired labor, than reported in the 1976 cost estimates because of the 
shift to larger enterprises. 

Even the smallest feeder-cattle enterprises reported using some 
hired labor, but operator and family labor accounted for 50 percent or 
more of all labor until beef herd size surpassed 500 head. All labor is 
charged at the average farm wage rate reported in " Agricultural 
Prices" for the applicable State, whether hired or family labor. The 
relevant social security tax, which was not included in the 1976 cost 
estimates, is then added as an additional cost of labor. This procedure 
may overstate labor cost in small operations where labor reported may 
not have been fully used. On the other hand, it may understate the 
cost in the largest operations where more use is made of highly skilled 
higher paid employees. Wage rates reported in the survey, however 
showed little variance among different sizes of feeder-cattle enterprises 

BUILDINGS, EQUIPMENT, AND MACHINERY 

Machinery and equipment charged to feeder-cattle production re- 
flect those actually in use. Use varies by size, type, and system of feed- 
er-cattle production. Items used solely for feeder-cattle production are 
charged entirely to the cattle enterprise. Items used in multiple enter- 
prises are charged to feeder cattle in proportion to their use. General 
purpose farm machinery, such as tractors, are charged to the feeder- 
cattle enterprise on an hourly basis. 

All facilities used in feeder-cattle production are charged on the 
basis of actual use by producers, not according to engineering require- 
ments based on capacity. Although usage approaches capacity for the 
larger enterprises, it is rather low for the small ones. A low level of 
facility use contributes to a high overhead unit cost for small feeder- 
cattle enterprises, but this is often a necessary tradeoff when facilities 
are used for other enterprises on a multienterprise farm. 

Prices for machinery and general cattle equipment are lagged to their 
average age of 4 years to provide an investment basis to calculate in- 
terest and taxes. Farmers and ranchers reported the average ages of 
their major buildings ranging from 10 to 25 years; the most recently 
constructed facilities were usually associated with the largest enter- 
prises. Investments in buildings are lagged accordingly to compute 
interest on investment and taxes. 

Repairs and insurance on machinery, equipment, and buildings are 
based on current replacement cost rather than original cost. Repairs 
and insurance change with the prices for these facilities and have no 
relationship to original investment cost. 

Replacement reserves (in lieu of depreciation) also are based on the 
current cost of all facilities. The replacement reserve concept assumes 



9 

that a capital reserve must be earned to insure continuity of the en- 
terprise. See the Feds user's manual for more detail on the \v&y owner- 
ship costs are computed and allocated. 7 

livestock 

All beef cows in the herd are assumed to have been raised by the 
producer, and breeding bulls and all stockers in the stocker-feeder 
enterprise are assumed to have been purchased. Assessment values for 
breeding cattle are established as of January 1 of each budget year. 
Replacement heifers and cows in the breeding herd are carried in in- 
ventory as investment to compute interest charges. Change in value 
is measured through the sale prices received for cull breeding stock. 
No depreciation is taken on raised beef cows because the costs of 
raising the replacement heifers are included in budgeted costs and 
the salvage value of the cows is recovered through the sale of culls. 
Herd bulls are commonly purchased and are handled as a depreciable 
item with a salvage value. Costs of purchased stockers in stocker- 
feeder enterprises are entered as a cash cost not subject to depreciation. 

All budgets encompass the sale of feeder cattle and calves during the 
calendar year. Consequently, some calf births and all stocker-cattle 
purchases actually occurred during the previous year. All related feed 
costs apply to the appropriate production period. 

OVERHEAD 

All farms and ranches incur costs not directly chargeable to any 
specific enterprise, such as telephone, road maintenance, service 
buildings, membership expenses, and accounting costs. Overhead costs 
may be affected little, if any, by an enterprise which is a very small 
part of a total business. In such cases, a charge for overhead costs need 
not be considered for planning purposes. The importance of an enter- 
prise, however, cannot be determined by enterprise size alone. A small 
enterprise may be a significant part of a small farm or ranch business, 
while a much larger enterprise may be relegated to a minor role in a 
large farm or ranch business. All feeder-cattle enterprises, regardless 
of size, are assessed a share of general farm overhead costs. 

MANAGEMENT 

The 1973 Agriculture and Consumer Protection Act specified that 
a "return for management comparable to the normal management fees 
charged by other industries" be included in the cost of production es- 
timates. Average wage rates used for hired farm labor are insufficient 
to secure the services of managerial talent or to reward unpaid oper- 
ators for the management they provide. Therefore, a management 
charge is included at the rate of 7 percent of total cost, excluding land 
costs and purchase costs of feeder livestock. 

Management charges in general can be estimated several ways. No 
theoretical guide exists for agriculture, however, because management 
is usually rewarded residually. Furthermore, management is not 



7 "User's Manual, Livestock Budget Generator," Firm Enterprise Data System, Economic Research 
Service, U.S. Department of Agriculture, July 1975. 



10 

commonly separated from farm labor as an item. The 7-percent rate 
provides a management charge that appears to be reasonable for the 
average individual who performs such a service. The combined 
labor-management charge for the operator of a feeder-cattle enter- 
prise compares with the salaries of middle management in other 
professions. However, use of a constant percentage of total co^s 
may inequitably reward the inefficiencies of the small-volume pro- 
ducers with high unit costs, while perhaps not yielding enough for the 
large efficiently operated feeder-cattle enterprises. 

INTEREST 

Interest on operating capital is calculated using the Production 
Credit Association (PCA) recorded and projected interest rates for 
each of the areas represented. The average time that each input is 
employed in feeder-cattle production is calculated by the FEDS. 
Interest on the inputs is apportioned accordingly. Interest on the 
investment in machinery, equipment, and buildings used in feeder- 
cattle production is charged annually at the PCA rate. Interest on the 
livestock investment is based on the January 1 inventory values and 
the PCA rate. «• 

LAND 

Costs of grazed forages (private pasture and range) and hay pro- 
duced by the feeder-cattle operator are included in the budgets at 
cost of production, excluding land. Land cost in the budgets is 
limited to taxes based on the current market value of the land and is 
updated annually from the values estimated by the feeder-cattle 
producers who responded to the 1976 survey. Interest on the invest- 
ment in land is not charged as a cost of production. Land and risk are 
residual claimants to returns after the other costs are considered. 
Charges for rented public and private land are included in the budget 
estimates. 

Charges for interest on land investment are examined separately for 
three alternative acquisition dates — 1942-76, 1972-76, and 1977. 
Weighted average land values reflect the proportions of cropland, 
improved pasture or range, unimproved pasture or range, woodland 
pasture, and other land used for each cattle enterprise, as well as the 
proportions of any of these lands that are irrigated. Land costs are 
estimated for land owned by the cattle enterprise that was used 
primarily to produce grazing or harvested forages fed to the cattle. 
Land from which crop residues are grazed after harvest, and land in 
wheat that is grazed but later harvested for grain, is not charged 
against the feeder-cattle enterprise. Such land is assumed to have been 
used primarily for grain rather than for forage production. A charge 
for grazing of pasture in small grain is included in the budgets at the 
opportunity cost of leasing out the pasture for grazing. Regional 
average real estate tax rates are from State data reported in "Farm 
Real Estate Taxes" (Economics Statistics and Cooperatives Service, 
U.S. Department of Agriculture). Interest on land values is assessed 
at the average rate charged on real estate loans by the Federal Land 
Bank(s) servicing each feeder-cattle production region. 



11 

PRICES 

State or regional average prices reported in "Agricultural Prices" 
and "Livestock Market News" (Agriculture Marketing Service, U.S. 
Department of Agriculture) are used to estimate costs and returns 
for 1977. Each budget represents a specific region and amount of 
feeder-cattle production. The budgets that follow are aggregates of 
the individual area budgets and show weighted average costs and 
returns by type and size of enterprise for each region and the average 
for all regions. 

Some small items of cost not available through published sources, 
such as veterinary, medicine, and livestock hauling, are taken from 
the 1976 survey and adjusted to 1977, 1978, and 1979 projections. 

"Livestock Market News" price series are used to determine the 
weighted average prices received for cull cows and feeder cattle sold. 
The purchase and sales prices for stocker-feeder cattle also are derived 
in this manner. Prices varied greatly in 1977. The outcome for any given 
enterprise was affected substantially by the date on which cattle were 
sold or stocker cattle purchased. Average prices applicable to 1977 
cost estimates ranged as follows: Choice feeder calves, $28.75 to $49.42 
per hundredweight; choice feeder yearlings, $30 to $43.45 per hun- 
dredweight; cull cows, $21.25 to $28 per hundredweight; corn, $1.56 
to $2.69 per bushel; hay, $39.80 to $75 per ton; and 32 to 36 percent 
beef cattle protein supplement, $8.20 to $10.10 per hundredweight. 

Preliminary estimates of costs and returns for 1978 and projections 
for 1979 are provided in this report for national and regional aggre- 
gations by type of cattle-raising enterprise. Estimates of cost of pro- 
duction by size of enterprise would require projections on a month-by- 
month basis; such projections are not available. Preliminary costs 
and prices for 1978 and the estimates of costs and prices prepared in 
OASIS are used to adjust the 1977 aggregate estimates to the levels 
expected for 1978 and 1979. OASIS provided annual estimates for 
the major inputs and products of feeder-cattle production on a 
national average basis through 1979. The relative changes indicated by 
these estimates provide the information from which costs and returns 
are estimated for feeder-cattle production for 1978 and 1979. The 
projected costs of minor input items, such as livestock hauling, not 
covered by OASIS are based on the projections for major inputs of a 
similar character, such as a combination of indexes for fuels and motor 
supplies. 

FEEDER-CATTLE PRODUCTION 

Most production rates for 1977 remained the same as for 1976. 
Approximately 73 calves were weaned per 100 beef cows and replace- 
ment heifers in inventory on January 1. This production figure is based 
on a weighted average calving rate (calves born as a percentage of beef 
cows and heifers exposed for breeding) of 78 percent and a calf death 
rate, prior to weaning, that averaged 6.4 percent of all calves born. 8 

8 This calving rate computation is based on cows and yearling heifers in the breeding herd on January 1« 
Consequently, this calving percentage figure is lower than alternative figures based only on cows that had 
calved on January 1, which omits heifers in the breeding herd that will calve during the year, but had not 
calved prior to January 1. 



12 

Replacement of cows that died or were culled during the year required 
an average of 17 heifer calves per 100 cows and heifers. Therefore, an 
average of 56 calves were available for sale as feeder calves and year- 
lings per 100 cows and heifers in the herd. 

Based on these data and the average sales weight reported in the 
survey, 1977 sales weight of feeder calves and yearlings per cow and 
heifer in the herd averaged 291 pounds in all regions. The average 
weight of feeder calves and yearlings sold in 1977 was 519 pounds per 
head. Average cull-cow sales weight per cow and heifer remaining in the 
herd was 127 pounds. 

The average calf and yearling sales weight per cow was greater in 
1977 and 1978 than in 1976 due to changes in regional production and 
increased herd sizes. Larger enterprises tended to retain more of their 
calves in the herd and market them later as yearlings. 

Average purchase and sales weights for stocker-feeder enterprises 
were 415 and 645 pounds, respectively, in 1977. (Average purchase 
and sales weights for feeder cattle are listed in the tables.) 

Regional marketing weights in cow-calf enterprises reflect both the 
tendency to market more yearlings from the larger enterprises and 
regional variances. The Southeast, with fewer of the larger enterprises 
and most feeder cattle sold as calves, marketed feeder calves at an 
average weight of 259 pounds per cow and heifer in the herd. The 
Great Plains region marketed the heaviest feeder cattle, at 312 pounds 
per cow and heifer. The West, followed closely by the Great Plains, 
marketed the largest proportion of sales weight as yearlings. 

The production inputs for each size, type, and location of feeder- 
cattle enterprises are charged per cow in the herd and per hundred- 
weight of feeder cattle sold. Inputs used for animals lost to disease, 
predators, or other causes are taken into account. 

MANURE VALUE 

Livestock manure has potential fertilizer value. Other possible uses 
are only on the threshold of commercial feasibility. Realization of value 
depends on the production situation, measures of conservation, and 
use. Participants in the 1976 survey did not place emphasis on con- 
serving and using manure. Therefore, the estimates of costs and 
returns do not place a value for manure produced in feeder-cattle 
enterprises. 



PRODUCTION COSTS OF COW-CALF ENTERPRISES 



Feeder cattle are the primary product in cow-calf and cow-yearling 
enterprises, with culled breeding stock representing a secondary joint 
product. The relative importance of each of these products to cow-calf 
enterprise revenues varies over the cattle cycle. When the cattle 
inventory is being rapidly reduced (as in 1974 through 1978), cull sales 
are unsually large and prices correspondingly low. By contrast, cull 
cows are relatively scarce and high priced when the cattle inventory 
is being expanded as is expected during the next few years. 

Two measures of production costs are included in the analysis that 
follows: Costs per cow and costs per hundredweight of feeder cattle 
sold. Costs per cow are less affected by productivity differences among 
enterprises because the costs of maintaining a cow and her share of 
replacement heifers and herd bulls remain whether or not she produces 
a calf. On the other hand, costs per hundredweight of feeder cattle 
available for sale can be compared directly with feeder-cattle prices in 
assessing the profitability of a cow-calf enterprise, given anv cor- 
responding estimate of returns from cull sales. 

NATIONAL HIGHLIGHTS 

Total nonland costs of maintaining beef-cow herds to produce feeder 
calves and yearlings in the United States (five regions combined) 
during 1977 averaged $276.94 per cow (table 1). That is 31 percent 
more than the estimated 1976 production costs. 9 Higher prices for 
most inputs as well as the use of more purchased forage in 1977 (dis- 
cussed later) contributed to this increase. Costs of $95.16 per hundred- 
weight of feeder cattle sold were only 28 percent higher than the 1976 
estimate, however, because the 1977 computations involve an increase 
of 4 pounds per cow in the average feeder-cattle sale weight. The 
reason for the weight difference is that table 1 shows the weighted 
average of 107 enterprise budgets representing all important systems, 
sizes, and geographic locations of cow-calf production, while the 1976 
estimates were based on a subset of these budgets. 



'"Costs of Producing Feeder Cattle in the United States, 1976— Preliminary Estimates," op. cit. Cull 
cow credits of $34.56 per cow, or $12.17 per hundredweight of feeder cattle sold, must be added to the 1976 
estimates of total nonland costs to make them comparable to the data in table 1. 

(13) 



14 



TABLE 1.— COSTS AND RETURNS OF COW-CALF ENTERPRISES, ALL SIZES, ALL REGIONS, 1977 i 

[Amount in dollars] 





Costs and returns 
per cow 


Costs and returns per hundredweight feeder sold 3 




Supplementary 
enterprise, 
short run * 


Primary 
enterprise, 
short run 4 


Primary 
enterprise, 
long run* 


Item 2 


Cash 


Non- 
cash 


Total 


Non- 
Cash s cash s 


Cash* 


Non- 
cash s 


Cash s 


Non- 
cash 


RETURNS (per cow) 

Feeder calves (1.758 cwt)... 

Feeder yearlings (1.148 cwt) 

Cull cows (1.268 cwt) 


69.18 
45.91 
31.82 




69.18) 
45.91} 
31.82 


39.55 

10.93 


39.55 . 
10.93 . 




39.55 .. 

10.93 .. 




Gross returns. 


146.91 




146.91 


50.48 


50.48 . 




50.48 „ 








DIRECT COSTS (per cow) 
Improved pasture (1.186 acres) 


19.46 

1.92 

1.95 

.99 


6.74 
.29 

1.19 
.49 


26.20 
2.21 
3.14 
1.48 


6.69 

.66 

.67 

.34 


6.69 . 
.66 . 
.67 . 
.34 . 




6.69 
.66 
.67 

.34 


2.31 


Small grain pasture (0.139 acre) 

Native pasture (0.712 acre) 

Private range (3.864 acres) 

Crop residue (1.039 acres) 6 




.10 
.41 
.17 


Rented pasture (1.885 acres) 


5.05 
1.37 
35.88 
2.32 
5.97 
6.84 
2.55 


" "7.24" 

1.33 


5.05 
1.37 
43.12 
3.65 
5.97 
6.84 
2.55 


1.74 

.47 

12.33 

.80 

2.05 

2.35 

.87 


1.74 . 
.47 . 

12.33 . 

.80 . 

2.05 . 

2.35 . 

.87 . 




1.74 „ 

.47 .. 
12.33 

.80 

2.05 .. 
2.35 .. 

.87 .. 




Public grazing (0.832 A.M.) 

Hay (1.328 tons) 

Silage (0.252 ton) 


~~2."49 
.46 


Grain and concentrate (1.552 cwt) 

Protein supplements (0.849 cwt) 

Salt and minerals (0.417 cwt). 








Subtotal, feed 


84.30 


17.28 


101.58 


28.97 


28.97 . 




28.97 


5.94 


Veterinary and medicine 


3.71 
1.04 
2.19 
8.57 
11.63 




3.71 
1.04 
2.19 
8.57 
11.63 


1.27 

.36 

.75 

2.95 

4.00 


1.27 . 

.36 . 

.75 . 
2.95 . 

4.00 . 




1.27 „ 
.36 „ 
.75 .. 

2.95 .. 
4.00 .. 




Livestock hauling 7 






Marketing 8 

Fuel, lube, and electricity.. 




Machinery and building repair 










Subtotal, other production items. 
Hired labor (2.79 hours) 


27.14 . 
7.92 . 
3.95 
7.77 . 


"Vm 


27.14 
7.92 
5.36 
7.77 . 


9.33 

2.72 

1.36 


9.33 . 
2.72 . 
1.36 . 
2.67 . 




9.33 .. 
2.72 _. 
1.36 
2.67 .. 








Interest on operating capital s 


.48 
















131.08 


18.69 


149.77 


42.38 


45.05 . 




45.05 


6.42 








OWNERSHIP COSTS 

Machinery and equipment, RITI 10 

Buildings and facilities, RITI 10 

Livestock, RITI " 


1.03 
1.48 


13.70 
23.09 
30.43 


14.73 . 
24.57 . 
30.43 . 




.35 . 
.51 . 





.35 
.51 


4.71 
7.93 




10.46 
















Total, ownership costs 


2.51 


67.22 


69.73 . 




.86 . 




.86 


23.10 


OTHER COSTS 

Operator and family labor (10.15 
hours) I2 ..- 

Management 


"11.28". 


28.78 
17.38 


28.78 . 
17.38 . 
11.28 . 






9.89 
5.97 


3.87 ... 


9.89 






5.97 




3.87 . 














Total cash and noncash costs. .. 
Total nonland costs 13 


144.87 


132.07 


276.94 

276.94 
•130.03 


42.38 

42.38 


49.78 15.86 
65.64 


49.78 
95.16 
-44.68 


45.38 

















1 Prices are the averages received or paid by producers. See text for more complete information. 

2 Physical quantities per cow, where applicable, are shown in parentheses. 

3 Sum of returns or designated costs per cow divided by the hundredweight per cow of steer and heifer feeder calves 
and yearlings sold. 

* See text for an explanation of the economic character of the enterprise and length of planning period. 

J Cash costs are the cash outlays for production items, the market values of readily salable items such as grain, and 
taxes, and insurance. Interest on direct expenses is apportioned between cash and noncash costs. Interest on all durable 
assets is listed as an opportunity cost, assuming full producer equity. 

» Only the costs of providing fencing and livestock water, if needed to graze crop residues, are charged to the cow-calf 
enterprise. These costs are included in equipment operating and ownership costs. 

7 Costs are for custom hauling only. Producer-supplied hauling costs are included in labor and machinery operating and 
ownership costs. 

8 Marketing costs reflect the extent to which producers utilize direct onfarm sales of feeder cattle. 

i Interest is charged on the cost (or assigned value) of all direct inputs and arbitrarily divided between cash and non- 
cash in proportion to their shares of total direct costs plus operator and family labor costs minus hauling and marketing 
fees. 

10 Replacement reserve, interest, taxes, and insurance. Repairs are included above. 

» Depreciation is charged for herd bulls only. Brood cows are assumed to be raised from heifer calves born in the opera- 
tion, and salvage values are recovered through the sale of cull cows. 

'- Operator and family labor ij valued at the hired labDr wage rate. 

13 Costs that need to be covered to justify operation under the assumed situation. 



15 



TABLE 2.-C0STS AND RETURNS OF COW-CALF ENTERPRISES, ALL SIZES, ALL REGIONS, 1978 i 
[Amount in dollars! 



Costs and returns per hundredweight feeder sold * 



Costs anj returns 
per cow 



Item 2 



Cash 



Non- 
cash 




Primary 
enterprise, 
short run < 



Primary 
enterprise, 
long run * 



Total Cash s 



Cash s 



Non- 
cash 5 



C3sh s 



RETURNS (per cow) 

Feeder calves (1.749 cwt) 117.05 117.05) 

Feeder yearlings (1.160 cwt) 69.92 69.92( 

Cull cows (1.270 cwt) 44.83 44.83 



64.25 
15.41 



64.25 64.25 

15.41 15.41 



Gross returns 



231.80 231. 



79.66 79.66 



79.66 



DIRECT COSTS (per cow) 



6.78 
.68 
.69 
.37 



Improved pasture (1.167 acres) 19.72 7.00 26.72 6.78 

Small grain pasture (0.141 acre) 1.98 .29 2.27 .68 

Native pasture (0.698) acre) 2.01 1.24 3.25 .69 

Private range (3.953 acres) 1.09 .51 1.63 .37 

Crop residue (1.041 acres) 8 

Rented pasture (1.927 acres) 5.27 5.27 1.81 1.81 

Public grazing (0.847 A.M.) 1.39 1.39 .49 .49 

Hay (1.249 tons) 31.27 7.75 39.02 10.75 10.75 

Silage (0.252 ton) 1.86 1.11 2.97 .64 .64 

Grain and concentrate (1.536 cwt) 6.11 6.11 2.10 2.10 

Protein supplements (0.858 cwt) 6.07 6.07 2.08 2.08 

Salt and minerals (0.417 cwt) 2.81 2.81 .97 .97 



6.78 
.68 
.69 
.37 



1.81 

.48 

10.75 

.64 

2.10 

2.08 

.97 



Subtotal, feed. 



79.58 17.93 97.51 27.35 27.35 



27.35 



Veterinary and medicine 3.83 3.83 

Livestock hauling 7 1.08 1.08 

Marketings 2.34 2.34 

Fuel, lube, and electricity 8.92 8.92 

Machinery and building repair 12.81 12.81 



1.32 
.37 



3.07 
4.40 



1.32 
.37 



3.07 
4.40 



1.32 
.37 



3.07 
4.40 



Subtotal, other production items. 28.98 28.98 9.96 9.96 

Hired labor (2.86 hours) 8.78 8.78 3.02 3.02 

Interest on operating capital' 3.93 1.61 5.54 1.35 1.35 

General farm overhead 8.10 8.10 2.78 



Total direct costs 129.37 19.54 148.91 

OWNERSHIP COSTS 

Machinery and equipment, RITI 10 1.15 15.33 16.48 

Buildings and facilities, RITM" 1.59 24.86 26.45 

Livestock, RITI H 38.73 38.73 



41.68 



44.46 



44.46 



.39 
.55 



,94 



Total ownership costs 2.74 78.92 81.66 

OTHER COSTS 

Operator and family labor (10.07 

hours)i2 30.97 30.97 10.65 

Management 18.31 18.31 6.29 

Land taxes 12.29 12.29 4.22 



4.22 



Non- 
cash * 



2.40 
.10 
.43 
.19 



2.66 
.38 



6.16 



9.96 

3.02 

1.35 .55 
2.78 



6.71 



5.27 

8.54 

13.31 



.94 27.12 



10.65 
6.29 



Total cash and noncash costs. .. 144.40 147.74 292.14 41.68 49.62 16.91 49.62 50.77 

Total nonland costs i3 292.14 41.68 66.56 100.39 

Returns to land and risk -60.34 -20.73 



Note: See table 1. for footnotes. 



47-085 0-79-4 



16 



TABLE 3.— COSTS AND RETURNS OF COW-CALF ENTERPRISES, ALL SIZES, ALL REGIONS, 1979" 

[Amount in dollars] 





Costs and returns 
per cow 


Costs and returns per hur 


idredweight feeder 


sold 3 




Supplementary 
enterprise, 
short run * 


Primary 
enterprise, 
short run « 


Prim: 
enterp 
long r 

Cash s 


iry 
rise, 
un * 


Item 2 


Cash 


Non- 
cash 


Total 


Non- 
Cash s cash s 


Cash s 


Non- 
cash s 


Non- 
cash s 


RETURNS (per cow) 
Feeder calves (1.749 cwt) 


. 150.99 
. 90.20 
. 60.97 




150.99) 
90.20( 
60.97 


82.88 

20.96 


82.88 
20.96 




82.88 . 
20.96 . 








Cull cows (1.270 cwt) 








Gross returns 


. 302.16 




302. 16 


103.84 


103.84 




103.84 . 








DIRECT COSTS (per cow) 

Improved pasture (1.167 acres) 

Small grain pasture (0.141 acre) 

Native pasture (0.698 acre) 


20.90 
2.20 
2.14 
1.21 


7.44 
.32 

1.32 
.59 


28.34 
2.52 
3.46 
1.80 


7.18 

.75 

.74 

.41 


7.18 . 
.75 . 

.74 . 
.41 . 





7.18 
.75 

.74 
.41 


2.56 
.11 

.45 


Private range (3.935 acres) 

Crop residue (1. OH acres) 9 . 


.20 


Rented pasture (1.927 acres) 


5.43 
1.39 
30.38 
1.93 
6.92 
6.64 
3.08 


"8.23" 

1.15 


5.43 
1.39 
38.61 
3.08 
6.92 
6.64 
3.08 


1.87 

.48 

10.44 

.66 

2.38 

2.28 

1.06 


1.87 . 

.48 . 
10.41 . 

.66 . 
2.38 . 
2.28 . 
1.06 . 




1.87 . 

.43 . 

10.44 

.66 

2.38 . 

2.28 . 

1.06 . 




Public grazing (0.847 A.M.) 




Hay (1.249 tons) 




2.83 


Silage (0.252 ton) 




.40 


Grain and concentrate (1.536 cwt) 




Protein supplements (0.853 cwt)- 






Salt and minerals (0.417 cwt) 












Subtotal, feed 


82.22 


19.05 


101.27 


28.25 


28.25 . 




28.25 


6.55 








Veterinary and medicine 


4.03 

1.22 

2.48 

10.74 

13.73 




4.03 
1.22 

2.48 
10.74 
13.73 


1.38 

.42 

.85 

3.63 

4.72 


1.38 . 

.42 . 

.85 . 
3.69 . 
4.72 . 




1.38 . 

.42 . 

.85 . 
3.69 . 
4.72 . 




Livestock hauling *.. _ _ 






Marketings 

Fuel, lube, and electricity 




Machinery and bjilding repair 










Subtotal, other prodjetionitems. 
Hired labor(2.86 hours) 


32.20 . 
9.49 . 
4.74 
8.60 . 


"T§5" 


32.20 
9.49 
6.69 
8.60 . 


11.06 

3.26 

1.63 


11.06 . 
3.26 . 
1.63 . 
2.96 . 





11.06 .. 
3.26 . 
1.63 
2.96 . 





Interest on operating capital 9 

General farm overhead 


.67 






Total direct costs 


137.25 


21.00 


158. 25 


44.20 


47.16 . 




47.16 


7.22 


OWNERSHIP COSTS 

Machinery and equipment, RITI «• 

Bjildhg and facilities, RITI "> 

Livestock, RITI » 


1.31 
1.70 


17.41 
26.55 
56.13 


18.72 _ 
28.25 . 
56.13 . 




.45 . 
.58 . 




.45 
.58 


5.98 
9.13 
19.29 




3.01 


100.09 


103.10 . 




1.03 . 




1.03 


34.40 








OTHER COSTS 

Operator and family labor (10.07 

hours) 12 

Management 


13.40 


33.48 

20.64 


33.48 . 
20.64 . 
13.40 . 






11.50 
7.09 


4.61 . 


11.50 
7.09 


Land taxes 




4.61 . 










Total cash and noncash costs... 

Total nonland costs 13 

Retrun to land and risk 


153.66 


175.21 


328.87 
328.87 
-26.71 


44.20 

44.20 


52.80 18.59 
71.39 


52.80 
113 
-9 


60.21 
.01 
.17 

















Note: See table 1 for footnotes. 



17 

Nonland costs increased to $292.14 per cow, or $100.39 per hundred- 
weight of feeder sold, in 1978 (table 2). Pasture costs were only slightly 
higher than in 1977, and hay, silage, and protein supplement costs 
were lower. This helped to offset the more rapid increase in most other 
cost components, holding the 1977-78 increase in total nonland costs 
to 5.5 percent. Revenues failed to cover total costs in 1978, but loss- 
es were less than half as large as in 1977 because cattle prices increased 
an average of 41 percent for cull cows, 51 percent for yearlings, and 70 
percent for feeder calves. 

Costs in 1979 are projected to be 13 percent higher than in 1978, in- 
creasing to $328,87 per cow, or $113.01 per hundredweight of feeder 
cattle sold (table 3). Every component of nonland costs except hay 
costs and grazing fees for public land is projected to increase. The in- 
creases in prices for feeder cattle and cull cows are projected to be even 
greater, however, averaging about 29 percent for steer and heifer 
calves and yearlings and 36 percent for cull cows. Thus, enterpr se 
revenues are projected to increase to within $26.71 per cow of the total 
nonland costs that the average cow-calf enterprise must cover in 1979 
to pay full market rates for all inputs, including family labor and 
management, and accumulate a reserve fund large enough to allow 
eventual replacement of all capital facilities. 

ORGANIZATION OF COST DATA 

Several factors affect the types of costs that should be considered in 
analyzing the economic status of cow-calf production enterprises. The 
length of the planning horizon and the relative importance of feeder- 
cattle enterprises as a source of income to their operators are among the 
more important factors. 

Economic problems that must be resolved in feeder-cattle produc- 
tion range from day-to-day operational questions to investment de- 
cisions that may involve periods ranging up to 25 years. Feeder-cattle 
production is the major or sole enterprise on some farms and ranches; 
only a small supplemental part of the overall operation on other farms. 
No single production cost applies to all situations. However, the cost 
components applicable to specific problems can be selected from the 
budgets. 

Each table includes physical quantities, in parentheses, and total 
values per cow of both products and inputs associated with the enter- 
prise. Costs of inputs are divided into cash and noncash components, 
based on the extent to which the inputs necessitate cash outlays 
during the production year. Inputs are also grouped and summed 
within categories to show total costs that need to be covered to justify 
continued operation. The costs are also summarized for primary and 
supplementary enterprises in both longrun and shortrun settings. 

Total nonland costs are appropriate for longrun decisionmaking 
("primary enterprise, longrun" in budgets) concerning a feeder-cattle 
enterprise that represents the major or the only source of income to 
the operator and family. Total nonland costs cover all cash expenses, 
including real estate taxes, and noncash costs involved in maintaining 
beef cows to produce feeder calves and yearlings, with the exception of 
any costs associated with the use of land owned by the feeder-cattle 
operation. Total nonland costs in 1977 were $95.16 per hundredweight 



18 

of feeder cattle sold. Returns to the operation need to be greater than 
or equal to those costs to permit the replacement, as needed, of all 
capital assets so that the enterprise can continue indefinitely (table 1). 

Some costs have no bearing, however, on shortrun operational 
decisions of ongoing feeder-cattle production enterprises because they 
cannot be altered by the decisionmaker. Noncash ownership costs of 
existing buildings and equipment are an example. They remain un- 
changed, regardless of the level at which the enterprise is operated, 
until the assets need to be replaced. In fact, most noncash costs can be 
ignored in the year-to-year plans for the operation of an existing cow- 
calf enterprise. 

If the cattle enterprise is a major source of farm or ranch income 
("primary enterprise, shortrun" in budgets), the value of management 
and labor supplied by the operator and family, in addition to cash 
costs, must be obtained to provide living expenses. Average returns per 
hundredweight of feeder cattle sold in 1977 were $15.16 less than the 
$65.64 total of cash and relevant noncash costs applicable to such an 
enterprise (table 1). Returns in 1978, however, exceeded nonland costs 
of $66.56 by $13.10 per hundredweight (table 2), and projections are 
for returns to exceed cost by more than $32 per hundredweight in 1979 
(table 3). 

Nearly half of the U.S. farms with beef cows in 1974 had fewer than 
20 cows each; four-fifths had fewer than 50 each. Although the propor- 
tion of the smaller herds continues to drop even after 4 successive years 
(1975-79) of inventory reduction, more than one-third of the national 
beef-cow inventory was in these small herds in 1974. l0 Many, perhaps 
most, of these smaller cow-calf enterprises are supplemental parts of 
overall farm operations ("supplemental enterprise, shortrun" in the 
budgets). They provide an insignificant fraction of total farm or ranch 
income, and are not relied upon as a primary source of income for the 
operator's family living expenses. Noncash costs and general farm 
overhead expenses would change little, if any, even if such enterprises 
were discontinued. However, such enterprises can make an economic 
contribution to net farm income. Total costs per hundredweight of 
feeder cattle sold by such supplementary enterprises averaged $42.38 
in 1977 (table 1). Even with the depressed cattle prices of 1977, such 
enterprises added about $8.10 per hundredweight of feeder cattle sold 
to net farm income. This may help to explain why national beef-cow 
inventories were not reduced further and faster in response to the 
drastic decline in feeder-cattle prices in 1974. 

The range in costs that needed to be covered by enterprise returns in 
order for production to make a positive contribution to net farm in- 
come was wide in 1977 and progressively wider in 1978 and in the 1979 
cost projections (tables 1 to 3). Returns as low as $43 per hundred- 
weight of feeder cattle sold would have added to the net incomes of 
producers with supplementary enterprises in 1977 or 1978, and pro- 
ject ions indicate that $45 per hundredweight may do so in 1979. 
By contrast, a new entrant attempting to earn a major portion of 
income for living expenses from an average size enterprise and operat- 
ing with facilities of the same types and ages as the average of pro- 
ducers in all regions combined would have needed more than $95 per 



■""Livestock, Poultry, Livestock and Poultry Products, Fish," 1<J74 Census of ARrieulture, vol. II, 
Statistics by Subject, part 5, U.S. Department of Commerce, Hureau of the Census, June 1978. 



19 

hundredweight of feeder cattle sold in 1977 and more than $100 per 
hundredweight in 1978 to break even. The large declines in beef -cow 
numbers during 1977 and 1978 indicate that producers did not antici- 
pate returns of this magnitude. Cost and return projections for 1979 
also offer little incentive to prospective new cow-calf producers. 

CHANGES IN COST RATES AND PRICES 

Year-to-year changes in the costs of producing feeder cattle are 
attributable to some extent to changes in the types, amounts, or 
sources of inputs used. Much more important, however, are changes 
in resource prices or values. Trends in the cost of major inputs used in 
feeder-cattle production are shown in table 4, which shows the per- 
centage change in cost from the preceding year for each item. The 
prices of farm-produced inputs, such as grains and hay, have fluctuated 
widely from year to year (and from month to month) as have the costs 
of such processed inputs of farm origin as protein supplements. By 
contrast, the costs of most inputs of nonfarm origin have increased 
continuously during the 1970's. Explosive increases occurred in 1974 
and 1975; since then, the rates of increase have slowed, but the 
amounts of the increases remain rather high because the percentage 
changes are from continually higher bases. 

TABLE 4.-CHANGES IN THE COSTS OF SELECTED INPUTS USED IN FEEDER CATTLE PRODUCTION, 

1973-79 i 

Percentage change in cost from previous year 



Input item or cost 1973 1974 1975 1976 1977 1978 2 1979 * 



Farm origin: 

Hay 30.5 

Corn 61.5 

Grain sorghum 57.6 

Beef-cattle concentrate 32 to 36 

percent protein 43. 4 

Feeder calves* 29. 

Cull cows « 29.7 

Nonfarm origin: 

Wage rate 9.2 

Interest 16.9 

Taxes 2. 1 

Building and fences 12.2 

Autos and trucks 5.8 

Tractors and self-propelled ma- 
chinery 7.0 

Other machinery 6. 9 

Farm and motor supplies 5. 3 

Fuels and energy 7.4 

Agricultural chemicals 1.9 

Fertilizer 8.5 



25.5 


4.6 


12.9 


-1.5 


-12.6 


-1.2 


54.5 


-7.5 


-7.8 


-18.5 


3.4 


13.3 


43.4 


-6.1 


-7.0 


-22.2 


8.3 


14.8 


10.8 


-1.7 


7.7 


6.0 


-2.9 


9.4 


-32.3 


-20.3 


27.7 


4.9 


51.0 


29.0 


-22.1 


6.0 


-6.6 





45.3 


36.0 


14.8 


7.9 


9.4 


7.6 


8.3 


8.1 


20.0 


17.6 


13.0 


15.3 


16.1 


22.9 


6.2 


7.8 


7.2 


9.6 


7.6 


7.0 


23.1 


13.8 


4.4 


6.5 


7.3 


9.3 


11.0 


18.6 


11.0 


10.4 


6.5 


8.3 


17.5 


21.1 


11.3 


9.7 


9.1 


10.1 


14.4 


23.9 


14.2 


9.3 


7.9 


7.8 


22.5 


14.3 


-2.4 


.6 


3.4 


9.2 


37.1 


11.3 


5.6 


8.0 


4.2 


20.4 


13.3 


34.5 


8.8 


-9.8 


-6.2 


2.9 


63.7 


29.9 


-14.7 


-2.2 


-.5 


4.9 



1 Data from agricultural statistics and agricultural prices, Economics, Statistics, and Cooperatives Service, U.S. Depart- 
ment of Agriculture. 

2 Preliminary based on partial data for 1978. 

* Projected. 

* Choice feeder steer calves, Kansas City. 

* Utility grade cows, Omaha. 

These input cost trends explain why noncash costs — over which the 
operator has little control — have become a larger proportion of total 
costs; in 1978, noncash costs exceeded 50 percent of total nonland costs 
of feeder-cattle production. Although these costs, most of which are 
associated with capital items, can be postponed for a few years, the 
investments and their associated costs for replacement of worn-out 



20 

facilities have become so high that they may delay and retard beef -herd 
expansion even with the current, more favorable cattle prices. 

INVESTMENT IN FACILITIES AND BREEDING STOCK 



Some ranches and a few farms specialize in feeder-cattle production 
to the exclusion of other agricultural enterprises, although this is 
unusual and especially rare in the North Central and Southeastern 
regions. Thus, a variety of general purpose buildings, facilities, 
machinery, and equipment is available on most feeder-cattle farms, in 
addition to such specialized cattle facilities as corrals, feed bunks, 
and watering tanks or ponds. 

Data on investments in capital facilities used in cow-calf enterprises 
are grouped into three categories and valued on two different bases 
(table 5). The buildings and facilities category includes all livestock 
shelter and feed storage buildings and silos; fencing; lots; watering 
facilities such as ponds, wells, pumps, windmills, and tanks; and all 
other livestock equipment other than self-propelled or tractor-powered 
machinery. Investments in these facilities reflect only the proportion 
of their use attributed to feeder-cattle production in 1976, based on the 
producer survey. 

TABLE 5.— AVERAGE ACQUISITION AND 1977 REPLACEMENT COSTS PER COW FOR SPECIFIED FACILITIES AND 
BREEDING STOCK USED IN COW-CALF ENTERPRISES BY AVERAGE SIZE OF ENTERPRISE AND BY REGION, 1977 > 

[Dollars per cow] 



Average acquisition cost 2 



1977 replacement cost 



All regions 



Buildings Machinery 

and and 

facilities equipment 3 



Total 



Buildings Machinery 

and and 

facilities equipment 3 



Total 



Breeding 
stock * 



Herd size: 

All sizes 154.90 67.50 222.40 345.76 118.22 463.98 340.39 

Less than 100 188.13 93.72 281.85 427.80 164.14 591.94 334.00 

100 to 199 134.83 70.02 204.85 302.30 122.62 424.92 335.25 

200 to 499 118.46 32.58 151.04 261.37 57.06 318.43 358.75 

500 to 999 87.85 10.16 98.01 199.76 17.79 217.55 336.92 

1,000 or more.. 108.42 .85 109.27 266.06 1.48 267.54 363.70 

Region: 

Southeast 121.63 32.11 153.74 279.90 56.24 336.14 317.21 

Southwest.. 236.08 4.85 240.93 495.83 8.50 504.33 398.83 

West 150.50 4.36 154.86 355.50 7.64 363.14 332.43 

Great Plains 88.97 142.25 231.22 208.22 249.12 457.34 336.15 

North Central 194.13 141.53 335.66 431.10 247.86 678.86 324.53 

1 Investments include full purchase prices or contract costs of construction. 

2 Average acquisition costs are estimated by indexing 1977 replacement costs to year of purchase or construction. Build- 
ings range from 10 to 25 yr of age; other facilities, machinery and equipment average 4 yr of age for enterprises of all sizes. 

3 Includes the full investment in tractor-powered machines, although use may be shared with other enterprises. Invest- 
ments in tractors, trucks, and automobiles are not included. 

« Estimated Jan. 1, 1977, values per cow of breeding stock, including replacement females, herd bulls, and saddle horse* 
used in the feeder-cattle enterprise. 

The machinery and equipment category includes the total estimated 
average investments in all tractor- or truck-powered machines, such as 
general purpose or specialized feed wagons, trailers, and manure 
loaders and spreaders, that significant proportions of the producers 
surveyed were using in their feeder-cattle enterprises, even if they 
also served other livestock or crop enterprises. Excluded are tillage, 
cult ivation, or harvesting machinery used to produce pasture, range, 
or harvested forages grown either partially or exclusively as feed for 
the feeder-cattle enterprise. Charges for the use of such feed-producing 



21 

equipment are included, however, in the estimated costs of producing 
nonpurchased forages. Investments in tractors, trucks, and auto- 
mobiles also are omitted from table 5, as they are seldom used only 
for the cattle enterprise. Charges for their use are included in the 
feeder-cattle cost tables on an hourly or mileage basis. 

The two investment levels for buildings, facilities, equipment, and 
machinery are the average costs of these facilities at the time they 
were purchased or constructed, and their estimated replacement costs 
in 1977. Such items as buildings, silos, fences, and ponds range from 
10 to 25 years of age; other equipment and machinery are assumed to 
average 4 years old. Both investment levels reflect the actual rates of 
use reported by feeder-cattle producers. 

Investment costs of buildings and fencing increased only 6 percent 
from 1957 to 1967, while the price of machinery rose about a third. 
Beginning in the early 1970's, however, the price of capital items used 
in feeder-cattle production increased sharply each year. By 1977, the 
replacement costs of these facilities were nearly 2.5 times the acquisi- 
tion costs of similar items purchased 10 years earlier. These investment 
costs are projected to increase at an annual rate of 6 to 8 percent 
through 1979. 

Building and facilities investments per cow decline with increases in 
cow-calf enterprise herd size, except at the largest herd size of 1,000 or 
more cows (table 5). Unit investments are higher for smaller enter- 
prises, primarily because the percentages of capacity use are lower. 
Investments per cow in the largest enterprises are greater, however, 
because more expensive, specialized facilities are often used to reduce 
labor requirements and to expand the number of animals that can be 
managed by the owner-operator. 

Machinery investments per cow decline without exception as herd 
size increases. The capacity of machinery used in feeder-cattle pro- 
duction is even more seriously underutilized in small herds than is 
true in the case of buildings. For example, the least expensive tractor- 
powered manure loaders and spreaders available probably are adequate 
for the manure handling requirements of even the largest cow-calf 
enterprises because the cattle themselves distribute such a large per- 
centage of the wastes they produce onto the pastures or ranges that 
they graze during much of the year. Where confined or semiconfined 
winter feeding is practiced, however, even operators with small enter- 
prises may need or choose to own manure handling equipment to 
spread accumulated wastes one or more times per year. The full 
investment value of the machinery used appears in table 5, even if 
such machinery was acquired and used primarily to sendee another 
livestock or poultry enterprise. 

Investments in breeding stock, the third investment category, 
represent the inventory values of brood cows, replacement heifer 
calves and yearlings, and herd bulls as of January 1, 1977. Invest- 
ments per cow fluctuate only slightly with changes in herd size. 

DIRECT COSTS 

Items contributing to direct costs include: all feeds, whether grazed, 
harvested, or processed; veterinary services, medicines, and parasite 
control chemicals; custom livestock hauling and marketing commis- 
sions; fuel, lubricants, and electricity; building, equipment, and 



22 

machinery repairs; hired labor; interest on operating capital; and a 
share of general farm overhead expenses. Almost all direct costs 
represent cash outlays or the market value of readily salable grains 
produced in the feeder-cattle operation. Noncash costs are largely 
ownership costs of machinery used by operators of feeder-cattle 
enterprises to produce pasture, hay, or silage. 

Direct costs accounted for 54 percent of total nonland production 
costs in cow-calf enterprises in 1977; $131.08 of the $149.77 total 
direct cost per cow represented cash costs which normally must be 
met each production year (table 1). Direct costs represent declining 
proportions of total costs per cow and per hundredweight of feeder 
animals sold in 1978 and 1979 because of the more rapid increase in 
capital investments and their associated costs (tables 2 and 3). 

Feed 

Feed costs, averaging $101.58 per cow in 1977, comprised two-thirds 
of total direct costs in cow-calf enterprises (table 1). This was 45 per- 
cent more in dollar terms and a slightly higher percentage of total 
direct costs than feed costs in the 1976 cost estimates. 11 The use of 
more hay per cow, with a larger proportion of that purchased at the 
high hay prices that prevailed during the first quarter of 1977, was 
largely responsible for these increases. The high hay prices, particularly 
in the North Central and Southeast regions, were caused, in turn, by 
regional hay shortages resulting from drought-reduced hay yields in 
1976 and the abnormally large quantities of hay required to maintain 
cow herds through the prolonged, harsh winter of 1976-77. 

The costs of grazed forages (pasture, range, crop residue, and public 
grazing) and harvested forages (hay and silage) represent 85 percent of 
feed costs. The relative importance of forages in cow-calf enterprises is 
understated in the budgets, however, because costs for land used by 
operators of feeder-cattle enterprises to produce forages are not in- 
cluded as feed costs (table 1). Land taxes are listed separately, and 
interest on the value of the land is discussed in a later section. Only the 
costs of improvement practices, such as seeding, fertilizing, and ^ eed 
or brush control, are included for nonrented, privately owned pasti re; 
and range. Thus, no cost is shown for more than 1 acre of crop residues 
per cow that the cattle were allowed to graze. Similarly, the costs of 
private range, at only $1.48 per cow for grazing almost 4 acres, are 
low because only a small percentage of rangeland is improved each 
year. 

Hay costs reflect estimated costs of production, excluding land costs, 
for the average proportion of hay produced on land operated by feeder- 
cattle producers and the weighted average price received by farmers 
for the proportion purchased. All silage is valued on the basis of its 
estimated grain content priced at the farm-level market price for grain, 
plus additional direct costs of harvesting silage rather than corn. 
Grain costs also represent farm-level prices for the months and loca- 
tions of their use. 

Feed costs in 1978 were only about 96 percent of their 1977 level, at 
$97.51 per cow, or $27.35 per hundredweight of feeder sold (table 2). 
Reductions in the amount and unit cost of hay, the cost of silage, and 
the price of protein supplement feeds more than offset minor increases 



'Cost of Producing Feeder Cattle in the United States, 1976— Preliminary Estimates," op. cit. 



23 

in the costs of other feed inputs. Feed costs per cow are projected to 
increase in 1979 to $101.27, despite a small reduction in hay costs 
attributable to improved yields for the 1978 hay crop, most of which 
will be fed in the first quarter of 1979. 

Facility and machinery operation 

Repairs to buildings, facilities, equipment, and machinery used in 
cow-calf enterprises were a distant second to feed as a proportion of 
direct costs in 1977, accounting for less than 8 percent of the total. 
All repair costs are charged as cash outlays, even though many pro- 
ducers do much of their own repair work, especially on buildings. 
Costs for fuel, lubricants, and electricity represented more than 5 
percent of direct costs in 1977. Thus, operation of facilities and 
machinery accounted for about 13.5 percent of total direct costs per 
cow in 1977, not counting machinery operating costs associated with 
forage production which are included in pasture, hay, and silage costs. 
Facility and machinery operating costs (fuel, lubricants, and elec- 
tricity; and machinery and equipment repairs), at $21.73 in 1978 and 
$24.47 in 1979, increased to 14.5 percent of total direct costs in 1978 
and are projected to increase to 15.5 percent in 1979. These increases 
reflect the continuing rapid increases in the costs of fuel, repair parts, 
and services. 

Labor 

Total labor costs were $12.61 per hundredweight of feeder cattle sold 
in 1977, but costs of hired labor, which contribute to direct costs, 
represent only 21.5 percent of the total labor costs. Costs for both 
hired and operator and family labor reflect average hired farm labor 
wage rates plus social security taxes. Total labor costs increased to 
$13.67 per hundredweight in 1978 because of an 8.4-percent increase 
in the weighted average wage rate, and hired labor increased slightly 
to 22 percent of the total. This occurred because of minor shifts be- 
tween 1977 and 1978 in the regional location and herd-size distri- 
bution of feeder-cattle enterprises. Labor costs in 1979 are projected 
to be 8 percent higher than in 1978. 

Almost 13 hours of labor per cow are used in the average cow-calf 
enterprise, according to the 1976 survey. This is probably more labor 
than is really needed, and continuing wage-rate increases will probably 
lead to more efficient labor use. 

Other direct costs 

Costs of veterinary services and medicines, livestock hauling and 
marketing, interest on operating capital, and general farm overhead 
outlays totaled $20.07 per cow and were 13.4 percent of total direct 
costs in 1977. All of these other direct costs are shown as cash outlays, 
except for interest on operating capital (which is divided between cash 
and noncash costs in the same proportion as the direct costs total), 
although a portion of general farm overhead expenses may include 
noncash items. 

The sum of these other direct costs increased to $20.89 per cow in 
1978, and is projected at $23.02 for 1979. The increase from 1977 to 
1978 was rather small, only 4 percent, because the reduction in feed 
costs constrained the increase in operating capital on which interest 
was charged. The 10-percent increase from 1978 to 1979 reflects higher 
interest rates. 



47-085 0-79 



24 



OWNERSHIP COSTS 



Ownership costs are based on the estimated value of machinery and 
equipment, buildings and other depreciable facilities, beef-cattle 
breeding stock, and horses used in the cow-calf enterprise, where 
applicable. Ownership costs include replacement reserve charges 
(in iieu of depreciation), interest, taxes, and insurance. 

Ownership costs of $69.73 per cow represented one-fourth of total 
nonland costs in the average cow-calf enterprise in 1977 (table 1). 
Ownership costs must be covered eventually for production to con- 
tinue, but less than 4 percent of the total (taxes and insurance pre- 
miums on machinery and facilities) are classified as cash costs which 
come due each year. Replacement charges and interest on investment 
in machinery and facilities make up more than half of the total; 
interest on the January 1 inventory value of all breeding stock and 
replacement charges for herd bulls and saddle horses make up the 
remainder. No replacement charges are included for female breeding 
stock because all replacement heifers are assumed to be selected and 
raised from calves produced in the feeder-cattle enterprise. 

Classifying all interest on capital investments as noncash costs 
implies full operator equity, although no information on the debt- 
equity positions of feeder-cattle producers is available. To the extent 
that the average producer has loans outstanding, interest would be 
a cash expense, as would annual payments on the unpaid loan principal. 

Ownership costs per cow in 1978 were 17 percent g -eater than in 
1977 (table 2). Increase of 7 to 9 percent in machinery and facility 
investment values of almost 20 percent in the inventory value of 
breeding stock, in combination with higher interest rales, were 
responsible. A 26-percent jump to more than $103 per cow is projected 
for 1979 ownership costs, reflecting anticipated increases in interest 
rates, in machinery and facility investment levels, and in livestock 
inventory values. The explosive rise in January 1 breeding stock 
values — about 60 percent between 1977 and 1979 — will boost owner- 
ship costs of livestock to more than half of total ownership costs 
projected for 1979 (table 3). This represents a welcome increase for 
current cow-calf producers in the book value of their enterprises as 
well as an increase in the proportion of total ownership costs that 
can be affected by changing enterprise size. In contrast, it represents 
an increasing barrier to entry for prospective new producers. 

OTHER NONLAND COSTS 

Operator and unpaid family labor increased noncash costs in 1977 by 
almost $10 per hundredweight of feeder-cattle sold. The average ; rm 
wage rate may undercompensate the labor input of many operators 
and the specialized labor inputs provided by some family members. 
A wife who functions as the bookkeeper for a large feeder-cattle enter- 
prise, for example, provides specialized services that normally could 
not be acquired elsewhere at the farm wage rate. On the other hand, 
it may represent more than opportunity returns for many family 
workers, such as juveniles or retired elderly workers. With very few 
exceptions, however, it is not adequate to compensate enterprise 
operators for their management services. 



25 

Valuing management as explained earlier, the cost of management 
averaged $17.38 per cow, or just under $6 per hundredweight of feeder 
sold in 1977 (table 1). Management costs increased with total nonland 
production costs, minus land taxes, to $6.29 per hundredweight in 
1978 and will rise to over $7 in 1979 (tables 2 and 3). Management in 
feeder-cattle production is typically a noncash cost, as it is classified 
in this analysis. 

Real estate taxes, although technically a land cost, are included in 
the nonland costs because they are cash costs not directly related to 
land investment. Taxes are assessed for land owned and operated as 
an integral part of the feeder-cattle enterprise ; that is, operator-owned 
land used primarily to produce pasture, range, hay, and silage utilized 
in feeder-cattle production. Crop residue acreage is omitted because 
production of some other crop is its primary use. Similarly, no land 
taxes are charged for rented pasture or public grazing lands. However, 
rental fees, included as direct feeder-cattle production costs, should 
reflect opportunity costs of land ownership, including taxes. 

Current taxes on land constituted a cash cost of $3.87 per hundred- 
weight of feeder cattle sold in the average cow-calf enterprise in 1977. 
This cost increased to $4.22 per hundredweight in 1978 and is projected 
to average $4.61 in 1979. 

Taxes may be the only cash cost of using land in which the operator 
has full equity. Farmland, however, is a valuable asset, and ownership 
of land usually involves investments that eventually must be recouped 
through economic use and/or resale of the land. 

LAND OWNERSHIP COSTS 

Agricultural land is a unique form of capital, in that its value does 
not normally depreciate with use over time. During the 1970's, in 
fact, average farmland values in the United States increased at rates 
ranging from 8 to almost 25 percent annually. 12 Thus, land value 
appreciation has been a major contributor to the net worth of farm- 
land owners. For many feeder-cattle producers, realized and antic- 
ipated appreciation in the value of forage-producing land has been 
the primary economic incentive to stay in business during the period 
of depressed feeder-cattle prices and negative enterprise net returns 
since 1973. Land value appreciation represents noncash returns that 
may be used to increase borrowing capacity to meet cash expenses. 

Similarly, interest on the investment value of farmland used in 
feeder-cattle production represents a noncash cost to the operator 
who has full equity in the land. There are no clearcut guidelines, 
however, to indicate the interest rate or the investment value that 
should be used to compute this interest cost. Three alternatives are 
presented in this analysis. 



12 "Farm Real Estate Market Developments," CD-83, Economics, Statistics, and Cooperatives Service, 
U.S. Department of Agriculture, July 1978. 



26 

Data on both acreages of land per cow and market values per acre 
of various classifications of land used in feeder-cattle production 
were obtained in the 1976 producer survey. Survey results also indi- 
cated that more than 86 percent of the land owned by cow-calf pro- 
ducers was acquired prior to 1971, but they did not provide specific 
details on average land acquisition dates or debt loads of producers. 
Other available data indicate, however, that slightly less than 3 
percent of the U.S. farmland acreage is sold each year, implying that 
land on the average farm or ranch was acquired over a 35-year period. 

Market values of the average 5.8 acres per cow of operator-owned 
land were estimated by survey respondents to average $1,667.50 in 
1976. Computed at the 5.41-percent average interest rate charged by 
Federal Land Banks between 1942 and 1976, noncash land costs in 
1977 averaged $30.46 per cow, or $10.47 per hundredweight or feeder 
cattle sold (table 6). That is, a charge of $30.46 per cow would have 
been required in 1977 to pay average 1942-76 Federal Land Bank 
interest rates on the $563 acquisition value of 5.8 acres of land ac- 
quired over this period and used in 1977 to produce pasture, hay, and 
silage for the average cow-calf enterprise. 

TABLE 6.-UNALL0CATED LAND CHARGE ALTERNATIVES, COW-CALF ENTERPRISES, 1977 i 





Owned acres 
per cow 
(acres) 


Land value 
per cow 




Land charge 


Acquisition date 


Federal Land 
Bank rate 
(percent) 


Per cow 


Per hundred- 
weight feeder 
sold 


All regions: 

1942-76 

1972-76 


5.80 

5.80 


$563 
1,273 
1,950 

578 

1,307 
2,002 

512 

1,157 
1,772 

392 

887 

1,358 

484 
1,094 
1,676 

775 
1,753 
2,685 


5.41 

8.08 
8.39 

5.40 
2 8.06 
2 8.37 

5.24 
2 7.83 
2 8.13 

5.47 
2 8.18 
2 8.49 

5.44 
2 8.12 
2 8.43 

5.53 
2 8.26 
2 8.58 


$30. 46 
102.86 
163.60 

31.21 

105.34 
167.57 

26.83 
90.59 
144.06 

21.44 
72.56 
115.29 

26.33 
88.83 
141.29 

42.86 
144. 80 
230.37 


$10.47 
35.35 


1977 

Southeast: 

1942-76 


5.80 

3.67 


56.22 
12.05 


1972-76 


3.67 


40.67 


1977 

Southwest: 

1942-76 


3.67 
7.20 


64.70 
9.19 


1972-76... 


7.20 


31.02 


1977 

West: 

1942-76 


7.20 
4.07 


49.34 

7.01 


1972-76.. 


4.07 


23.71 


1977 

Great Plains: 

1942-76 


4.07 

10.56 


37.68 
8.44 


1972-76 


10.56 


28.47 


1977 

North Central: 

1942-76 

1972-76 


10.56 

3.92 

3.92 


45.29 

13.87 
46.86 


1977 


3.92 


74. 5 5 



1 Interest on investment in land used in and owned by the feeder cattle operation. Costs for use of rented private land 
and public lands are included as direct costs in tables 1 and 12 through 16. 

2 Regional interest rates for the 1942-76 and 1972-76 periods are computed by multiplying the 1977 regional rates by 
the "all regions" ratios of 1977 to the earlier period rates. 



27 

Economic logic suggests, however, that the cost of land use should be 
based on its current investment value. Opera tor-owned land used per 
cow for forage production in 1977, indexed to the 5-year period 
1972-76, had an investment value of $1,273. Land costs charged at 
the average land bank interest rate that prevailed over this 5-year 
period increased more than threefold to $35.35 per hundredweight of 
feeder cattle sold. A new entrant into feeder-cattle production who 
purchased all land in 1977 would have had a land investment of 
$1,950 per cow. Interest cost alone on this investment, with no 
principal payment, would have amounted to $56.22 per hundredweight 
of feeder cattle available for sale. Interest on land investment would 
have exceeded total enterprise gross returns by more than $16 per 
cow (tables 1 and 6). Thus, neither current nor projected cattle 
prices offer much inducement to invest in land for the sole purpose of 
producing feeder cattle. If recent rates of land value appreciation, 
about $175 on the value of land used per cow in 1977, can be expected 
to continue, however, investment in farmland may be considered an 
attractive hedge against inflation. Feeder-cattle production may be 
used to earn at least a portion of the costs incurred in owning land to 
obtain anticipated capital gains. 

EFFECT OF ENTERPRISE SIZE ON UNIT COSTS 

Average costs discussed above present an overall picture of the 
costs of the cow-calf industry. Averages, however, mask the pro- 
duction cost differences of producers with different size enterprises. 
Therefore, cost estimates for 1977 are presented for enterprises ranging 
in size from less than 100 to more than 1,000 cows (tables 7 to ll). 13 
Not shown in these estimates is the substantial variation in production 
systems used, rates of performance, effectiveness in purchasing inputs 
and marketing cattle, and the resulting costs and returns among 
individual producers with enterprises of the same size. 

13 Detailed costs and returns by type and size of enterprise also are available for each of the five regions. 
This report presents only the average effects of enterprise size for all regions combined. Regional differences 
in costs and returns for enterprises of average size within each region are presented ir the next section of 
this report. 



28 



TABLE 7— COSTS AND RETURNS OF COW-CALF ENTERPRISES, LESS THAN 100 COWS, ALL REGIONS, 1977 

(Amount in dollars] 





Costs and returns 
per cow 


Costs and returns per hundredweight feeder 


sold' 




Supplementary 
enterprise, 
shortrun * 


Primary 
enterprise, 
shortrun * 


Primary 
enterprise, 
longrun* 


item 2 


Cash 


Non- 
cash 


Total 


Non- 
Cash « cash s 


Cash* 


Non- 
cash* 


Cash s 


Non- 
cash s 


RETURNS (per cow) 
Feeder calves (1.925 cwt).. - - -.. 


74.39 
37.75 
30.93 




74.39 
37.75 
30.93 


| 39.07 

10.78 


39.07 

10.78 




39.70 . 
10.78 . 




Feeder yearlings (0.946 cwt) 

Cull cows (1.189 cwt) . 








Gross returns 


143.07 




143.07 


49.85 


49.85 




49.85 . 








DIRECT COSTS (per cow) 

Improved pasture (1.749 acres) 

Small grain pasture (0.142 acre) 

Native pasture (0.990 acre).. . 


27.28 

2.00 

2.68 

.51 


10.73 
.41 
1.62 
.34 


38.01 

2.41 

4.30 

.85 


9.50 

.70 

.93 

.18 


9.50 
.70 
.93 
.18 





9.50 
.70 
.93 
.18 


3.74 
.14 
.57 


Private range (1.172 acres) . 


.12 


Crop residue (1.276 acres) 8 ... 




Rented pasture (0.861 acre)... 


2.71 
.26 
31. 15 
1.97 
8.46 
7.88 
3.07 


"~16.~24~ 

1.28 


2.71 
.26 

47.39 
3.25 
8.46 
7.88 
3.07 


.94 

.09 

10.85 

.69 

2.95 

2.75 

1.07 


.94 
.09 . 
10.85 
.69 . 

2.95 . 

2.75 . 

1.07 . 




.94 . 

.09 . 
10.85 

.69 

2.95 _ 
2.75 . 
1.07 . 




Public grazing (0.156 A.M.) 

Hay (1.478 tons) 

Silage (0.221 ton) 


""5." 66 

.44 


Grain and concentrate (2.187 cwt) 




Protein supplements (0.947 cwt) 

Salt and minerals (0.471 cwt) 






Subtotal, feed 


87.97 


30.62 


118.59 


30.65 


30.65 . 




30.65 


10.67 






Veterinary and medicine. .. .. . 


4.15 
. 1.03 

2.56 
. 11.33 

15.45 




4.15 
1.03 
2.56 
11.33 
15.45 


1.45 

.36 

.89 

3.95 

5.38 


1.45 
.36 
.89 
3.95 
5.38 




1.45 . 

.36 . 

.89 . 
3.95 . 
5.38 . 




Livestock hauling 7 

Marketing s 

Fuel, lube, and electricity 

Machinery and building repair 




Subtotal, other production items. 


34. 53 




34.53 


12.03 


12.03 . 




12.03 . 










Hired labor (1.67 hours) 


4. b4 
4.57 
9.29 


"2.35" 


4. b4 
6.92 
9.29 


l.b2 

1.59 


1.62 . 

1.59 

3.24 




1.62 . 
1.59 
3.24 . 




Interest on operating capital ' 


.82 










141.00 


32.97 


173.97 


45.89 


49.13 . 




49.13 


11.49 






OWNERSHIP COSTS 

Machinery and equipment, RlTl '° 

Buildings and facilities, RlTl i« 

Livestock, RlTl » 


1.24 
1.90 


16.46 
29.78 
29.26 


17.70 
31.68 
29.26 




.43 
.66 




.43 

.66 


5.74 




10.38 
10.19 


















3.14 


75.50 


78.64 




1.09 




1.09 


26.31 








OTHER COSTS 

Operator and family labor (14.35 
hours) i: 


"ii."i7" 


40.24 
20.50 


40.24 
20.50 
11.17 . 






14.02 
7.14 


3.89 .. 


14.02 








7.14 


Land taxes 




3.89 . 










Total cash and noncash costs 

Total nonland costs ,3 

Returns to land and risk 


155.31 


169. 21 


324. 52 
324. 52 
-181.45. 


45.89 

45.89 


54.11 21.16 
75.27 


54.11 58.96 
113.07 
-63.22 



















Note: See table 1 for footnotes. 



29 



TABLE 8.— COSTS AND RETURNS OF COW-CALF ENTERPRISES, 100 TO 199 COWS, ALL REGIONS, 1977 1 

[Amount in dollars) 





Costs and returns 
per cow 


Costs and returns per hundredweight feeder sold » 

Supplementary Primary Primary 
enterprise, enterprise, enterprise, 
shortrun * shortrun * longrun* 


Item 2 


Cash 


Non- 
cash 


Total 


Non- 
Cash s cash * 


Non- 
Cash * cash * 


Non- 
Cash s cash 


RETURNS (per cow) 
Feeder calves (1.765 cwt) 


... 70.84 




70.84 
46.44 
32.27 


} 40.17 

11.05 


40.17 

11.05 


s 




46.44 


40. 17 -_-.- 


Cull cows (1.308 cwt) 


... 32.27 


11.05 



Gross returns 

DIRECT COSTS (per cow) 

Improved pasture (0.919 acre) 

Small grain pasture (0.189 acre).. 

Native pasture (0.468 acre) 

Private range (4.863 acres) 

Crop residue (1.034 acres) « 

Rented pasture (2.189 acres) 

Public grazing (0.611 A.M.) 

Hay (1.301 tons) 

Silage (0.481 ton) 

Grain and concentrate (1.402 cwt). 
Protein supplement (0.747 cwt)... 
Salt and minerals (0.389 cwt) 



149.55 149.55 51.22 



51.22 



15.14 
2.39 
1.64 
1.08 



5.41 20.55 

.44 2.83 

.74 2.38 

.58 1.66 



5.18 
.82 
.56 
.37 



6.38 
1.04 
35.29 
4.45 
4.83 
5.86 
2.32 



8.10 
2.58 



6.38 
1.04 
43.39 
7.03 
4.83 
5.86 
2.32 



2.18 

.36 

12.09 

1.52 

1.65 

2.01 

.79 



2.18 

.36 

12.09 

1.52 

1.65 

2.01 

.79 



Subtotal, feed. 



80.42 17.85 98.27 27.54 27.54 



Veterinary and medicine 

Livestock hauling 7 

Marketing s 

Fuel, lube, and electricity 

Machinery and building repair. 



3.63 
1.13 
2.10 
7.62 
10.27 



Subtotal, other production items. 



Hired labor (2.69 hours) 

Interest on operating capital 
General farm overhead 



3.63 
1.13 
2.10 
7.62 
10.27 



1.24 

.39 

.72 

2.61 

3.52 



1.24 

.39 

.72 

2.61 

3.52 



Total direct costs 

OWNERSHIP COSTS 



Machinery and equipment, RITI io .99 13.14 14.13 

Buildings and facilities, RITI io 1.23 19.36 20.59 

Livestock, RITI >' .:.... 30.53 30.53 



Total ownership costs 2.22 63.03 65.25 

OTHER COSTS 

Operator and family labor (8.88 

hours)".... 25.85 25.85 

Management. 16.37 16.37 

Land taxes 11.50 11.50 



51.22 



5.18 
.82 
.56 
.37 



2.18 

.36 

12.09 

1.52 

1.65 

2.01 

.79 



27.54 



1.24 

.39 

.72 

2.61 

3.52 



Total cash and noncash costs... 137.44 124.35 261.79 

Total nonland costs '3 261.79 

Returns to land and risk -112.24 



39.86 .... 
39.86 



47.07 14.46 
61.53 



1.85 
.15 
.25 
.20 



2.78 



6.11 



. 24.75 . 


24.75 


8.48 


... 8.48 


.... 8.48 . 




. 7.72 . 
3.49 
7.34 . 


7.72 

1.25 4.74 
7.34 . 


2.64 

1.20 


... 2.64 

... 1.20 

... 2.51 


... 2.61 .. 
... 1.20 
... 2.51 .. 


""".43 










. 123.72 


19.10 142.82 


39.86 


... 42.37 


... 42.37 


6.54 



4.50 
6.63 
10.46 



76 21.59 



8.85 8.85 

5.61 5.61 

3.94 3.94 



47. 07 42. 59 

89.66 
. -38. 44 



Note: See table 1 for footnotes. 



30 



TABLE 9.— COSTS AND RETURNS OF COW-CALF ENTERPRISES 200 TO 499 COWS, ALL REGIONS, 1977' 

[Amount in dollars] 



Costs and returns 
per cow 



Item' 



Cash 



Non- 
cash 



Total 



Costs and returns per hundredweight feeder sold i 



Supplementary 
enterprise, 
shortrun* 



Primary 
enterprise, 
shortrun* 



Primary 
enterprise, 
longrun * 



Non- Non- 

Cash « cash* Cash* cash* Cash 



Non- 
cash 



RETURNS (per cow) 

Feeder calves (1.454 cwt) 58.67 58.67 

Feeder yearlings (1.523 cwt) 61.43 61.43 

Cull cows (1.380 cwt) 33.12 33.12 



40.30 
11.12 



40.30 
11.12 



40.30 
11.12 



Gross returns 1^3 2? 1^3 2? SI 4^ si. 4? 

DIRECT COSTS (per cow) 



3.03 
.21 
.74 
.69 



Improved pasture (0.502 acre) 9.08 

Small grain pasture (0.133 acre) 1.55 

Native pasture (0.443 acre) 1. 05 

Private range (7.042 acre r ) 1.51 

Crop residue (0.782 acres) « 

Rented pasture (3.453 acres) 8.43 8.43 

Public grazing (1.864 A.M.) 3.27 3.27 

Hay (1.273 tons) 35.99 5.42 41.41 

Silage (0.144 ton) 1.34 .56 1.90 

Grain and concentrate (0.839 cwt) 3.34 3.34 

Protein supplements (0.686 cwt) 5.43 5.43 

Salt and minerals (0.367 cwt) 2.04 2.04 



2.83 
1.10 
12.08 
.45 
1.12 
1.82 



Subtotal, feed 73.03 10.65 83 68 24.51 



Veterinary and medicine 3.44 3.44 1.15 

Livestock hauling? .95 .95 .32 

Marketing* 1.81 1.81 .61 

Fuel, lube, and electricity 5.65 5.65 1.90 

Machinery and building repair 7.61 7.61 2.55 



Hired labor (3.83 hours) 10.90 

Interest on operating capital 9 2.90 

General farm overhead 6. 16 



.... 10.90 
75 3. 65 
.... 6.16 



3.66 
.97 



Total, direct costs 

OWNERSHIP COSTS 



Machinery and equipment, RITI io 85 11.35 12.20 

Buildings and facilities, RITI io 1.02 16.02 17.04 

Livestock, RITI H 33.03 33.03 



Total ownership costs 1.87 60.40 62.27 

OTHER COSTS 

Ope 

Management-... 14.26 14.26 

Landtaxes 11.04 11.04 



2.83 

1.10 

12.08 

.45 

1.12 

1.82 

.68 



24.51 



1.15 

.32 

.61 

1.90 

2.55 



3.66 

.97 

2.07 



112.45 11.40 123.85 35.67 37.74 



.29 
.34 



.63 



SI. 42 



12.11 


3.05 


3.05 


3.05 


1 01 


1.76 


.52 


.52 


.52 


.07 


1.79 


.35 


.35 


.35 


.25 


2.20 


.51 


.51 


.51 


.23 



2.83 
1.10 
12.08 
.45 
1.12 
1.82 
.68 



24.51 



1.15 
.32 
.61 

1.90 
2.55 



Subtotal, other production items. 19.46 19.46 6.53 6.53 6.53 



3.66 

.97 

2.07 



37.74 



.29 
.34 



1.82 
.19 



3.57 



25 



3.82 



3.81 
5.38 
11.08 



.63 20.27 



4.78 



5.91 
4.78 



3.70 



3.70 



Total cash and noncash costs... 125.36 103.66 229.02 35.67 42.07 10.70 42.07 34.78 

Total nonland costs '3 229.02 35.67 52.77 76.85 

Returns to land and risk -75.80 -25.43 



See table 1 for footnotes. 



31 

TABLE 10— COSTS AND RETURNS OE COW-CALE ENTERPRISES, 500 TO 999 COWS, ALL REGIONS, 1977i 

[Amount in dollars] 



Costs and returns 
per cow 



Item 2 



Cash 



Non- 
cash 



Costs and returns per hundredweight feeder sold * 



Supplementary 
enterprise, 
shortrun 4 



Total Cash " 



Primary 
enterprise, 
shortrun* 



Non- 
cash' Cash* 



Primary 
enterprise, 
longrun ' 



Non- Non- 

cash 5 Cash* cash* 



RETURNS (per cow) 



Peeder calves (1.656 cwt). . . 
Eeeder yearlings (1.209 cwt). 
Cull cows (1.329 cwt) 



65.39 
47.54 
32.64 



65.3s 
47.54 
32.64 



39.42 
11.39 



39.42 
11.39 



Grossreturns 145.57 145.57 50.81 50.81 



DIRECT COSTS (per cow) 

Improved pasture (0.633 acre) 

Small grain pasture (0.019 acre).. 

Native pasture (0.648 acre) 

Private range (4.566 acres) 

Crop residue (0.496 acre) » 

Rented pasture (3.213 acres) 

Public grazing(1.694 A.M.) 

Hay (0.753 ton).. 

Silage (0.158 ton) 

Grain and concentrate (0.523 cwt). 
Protein supplements (0.872 cwt).. 
Saltand minerals (0.295 cwt) 



11.51 

.78 

2.01 

1.71 



2.94 
.18 



66 



14.45 

.96 

2.87 

2.37 



4.02 
.27 
.70 
.60 



7.84 
2.26 
21.19 
1.35 
2.28 
6.58 
1.66 



3.29 
.57 



7.84 
2.26 
24.48 
1.92 
2.28 
6.58 
1.66 



2.74 
.79 

7.39 
.47 
.79 

2.30 
.58 



Subtotal, feed. 



59.17 8.50 67.67 20.65 



Veterinary and medicine 

Livestock hauling 7 

Marketing s 

Fuel, lube, and electricity 

Machinery and building repair. 



2.35 
.94 
1.57 
3.75 



Subtotal, other production items 



hired labor (4.80 hours) 

I nterest on operating capital 
General farm overhead 



2.35 
.94 
1.57 
3.75 
4.80 



.82 
.33 
.55 
1.31 
1.67 



Total direct costs 

OWNERSHIP COSTS 

Machinery and equipment, RITM° .55 7.29 7.84 

Buildings and facilities, RITI i« .76 11.89 12.65 

Livestock, RITI ii 29.82 29.82 



1.31 49.00 50.31 



Total ownership costs. 
OTHER COSTS 



Operator and family labor (2.53 hours) 12 7. 67 

Management 11. 27 

Landtaxes 12.11 



7.67 
11.27 
12.11 



4.02 
.27 
.70 
.60 



2.74 
.79 

7.39 
.47 
.79 

2.30 
.58 



20.65 



.82 
.33 

.55 
1.31 
1.67 



.19 
.27 



39.42 
11.39 



50.81 



4.02 1.02 

.27 .06 

.70 .30 

.60 .23 



2.74 

.79 

7.39 1.15 

.47 .20 

.79 

2.30 

.58 



20.65 



.82 
.33 
.55 
1.31 
1.67 



2.96 



13.41 . 


13.41 


4.68 


... 4.68 


... 4.68 .. 




14.17 . 
. 2.40 
4.92 


14.17 

. 45 2. 85 
4.92 . 


4.94 

.84 


... 4.94 

.84 

1.72 


... 4.94 .. 

.84 
... 1.72 .. 


"~\~16 










. 94.07 


8.95 103.02 


31.11 


... 32.83 


... 32.83 


3.12 



.19 2.55 
.27 4.15 
10.40 



17.10 



2.68 
3.94 



2.68 
3.94 



4.23 



23 



Total cash and noncash costs.... 107.49 76.89 184.38 31.11 37.52 6.62 37.52 26.84 

Total nonland costs is 184.38 31.11 44.14 64.36 

Returns to land and risk -38.81 -13.55 



Note: See table 1 for footnotes. 



32 



TABLE ll.-COSTS AND RETURNS OF COW-CALF ENTERPRISES, MORE THAN 1,000 COWS, ALL REGIONS, 1977 

[Amount in dollars] 





Costs and returns 
per cow 


Costs and returns per hundredweight feeder sold 3 




Supplementary 
enterprise, 
shortrun* 


Primary 
enterprise, 
shortrun 4 


Primary 
enterprise, 

longrun * 


Item 2 


Cash 


Non- 
cash 


Total 


Non- 
Cash* cash 8 


Cash* 


Non- 
cash* 


Cash* 


Non- 
cash 


RETURNS (per cow) 
Feeder calves (1.275 cwt) 


. 52.03 
. 64.91 
. 30.96 




52.03 
64.91 
30.96 


} 39.51 

10.46 


39.51 . 
10.46 . 




. 39.51 .. 
19.46 .. 




Feeder yearlings (1.683 cwt) 




Cull cows (1.274 cwt) 








Gross returns 


. 147.90 




147.90 


49.97 


49.97 . 




49.97 .. 








DIRECT COSTS (per cow) 
Improved pasture 


















Small grain pasture 


Native pasture 


Private range (17.372 acres) 


2.98 


0.70 


3.68 


1.01 


1.01 . 




1.01 


0.23 


Crop residue (0.158 acre) 8 .. 






Rented pasture (2.370 acres) 


2.88 
6.21 . 
22.56 

.91 . 

.36 . 
7.82 . 
1.44 . 


"3.91" 


2.88 

6.21 

26.4/ 

.91 

.36 

7.82 

1.44 


.97 

2.10 

7.62 

.31 

.12 

2.64 

.49 


.97 . 
2.10 . 
7.62 . 

.31 . 

.12 . 
2.64 . 

.49 . 




.97 .. 
2.10 .. 




Public grazing (4.217 A.M.) 




Hay (0.734 ton) 




/.6> 
.31 .. 
.12 .. 

2.64 .. 


1.32 


Silage (0.043 ton) 






Grain and concentrate (0.129 cwt) 

Protein supplements (1.137 cwt) 




Salt and minerals (0.364 cwt) 




.49 .. 








Subtotal, feed 


45.16 


4.61 


49.77 


15.26 


15.26 . 




15.26 


1.55 








Veterinary and medicine 


2.17 
1.14 . 
.97 . 
2.30 
3.60 . 




2.17 
1.14 
.97 
2.30 
3.60 


.73 

.38 

.33 

.78 

1.22 


.73 . 
.38 . 
.33 . 
.78 . 
1.22 . 




.73 .. 
.38 .. 
.33 .. 
.78 .. 
1.22 .. 




Livestock hauling 7 




Marketing' 

Fuel, lube, and electricity 




Machinery and building repair. 












Subtotal, other production items. 


10.18 . 





10.18 


3.44 


3.44 . 





3.44 








Hired labor (5.91 hours) 


15.45 . 
2.01 
3.96 . 


".19" 


15.45 
2.20 
3.96 . 


5.22 

.68 


5.22 . 
.68 . 
1.33 . 




5.22 .. 




Interest on operatingcapital » 




.68 
1.33 .. 


.07 


General farm overhead 














Total direct costs 


76.76 


4.80 


81.56 


24.60 


25.93 . 




25.93 


1.62 








OWNERSHIP COSTS 
Machinery and equipment, RITI "> 


.31 
1.12 


4.16 
17.61 
31.74 


4.47 . 

18.73 . 

31.74 . 




.10 . 
.38 . 




.10 
.38 


1.41 


Buildings and facilities, RITI i° 




5.95 


Livestock, RITI" 




10.72 














Total ownership costs 


1.43 


53.51 


54.94 . 




.48 . 




.. .48 


18.08 








OTHER COSTS 
Operator and family labor (1.22 hours)' 2 


"ii.65". 


3.22 
9.78 


3.22 . 
9.78 . 
11.05 . 






1.09 . 
3.30 . 


"174"... 


1.09 


Management . . 






3.30 


Land taxes 




3.74 .. 














Total cash and noncash costs 

Total nonland costs 1J 

Returns to land and risk. 


89.24 


71.31 


160. 55 
160. 55 
-12.65 . 


24.60 

24.60 


30. 15 4. 39 
34.54 


30.15 
54.24 
-4.27 


24.09 

















Note: See table 1 for footnotes. 



33 

Total nonland costs per hundredweight of feeder cattle sold averaged 
$95.16 in 1977 for all sizes of cow-calf enterprises combined (table 1). 
Total costs ranged downward from $113.07 per hundredweight for 
enterprises with fewer than 100 cows (table 7) to less than half as 
much, $54.24 per hundredweight, for enterprises with more than 1,000 
cows (table 11). Almost 60 percent of the total difference in unit 
production costs is attributable to noncash inputs, particularly the 
ownership costs of facilities and machinery and unpaid labor and 
management. However, cash costs declined from $54.11 per hundred- 
weight in the smallest enterprises to $30.15 in the largest. The shifting 
of labor costs from the noncash to the cash category, as hired labor 
became a larger share of total labor with increases in enterprise size, 
prevented still larger reductions in cash costs. 

A minor part of the differences in costs per hundredweight of feeder 
cattle sold in enterprises representing the various size classes is 
explained by differences in output; combined feeder calf and yearling 
sales per cow and replacement heifer in the herd varied from less than 
2.87 hundredweight in enterprises with 500 to 999 cows (table 10) 
to almost 2.98 hundredweight in enterprises with 200 to 499 cows 
(table 9). This source of variation is eliminated by considering costs 
per cow. 

The cash components of feed costs accounted for 65 percent of the 
$66.07 per cow total reduction in cash costs between the largest and 
smallest cow-calf enterprises (tables 7 and 11). Regional differences in 
the sources of grazing crops explain much of this difference. Costs for 
enterprises with fewer than 100 cows are the weighted average of costs 
budgeted for enterprises in most of the 36 subregions in all 5 regions, 
while the costs for enterprises with 1,000 cows or more are applicable 
to only a few subregions in the far Southwest and West. Thus, im- 
proved pastures, which involve relatively large cash outlays primarily 
for fertilizer, are a principal grazing source in the smallest enterprises. 
Private range, little of which receives annual improvement expendi- 
tures, is the most important source of grazing for cattle in the largest 
operations. 

Costs of operating machinery, particularly tractors and trucks, 
accounted for most of the remaining reduction in cash costs per cow as 
enterprise size increased. Hours of tractor use and truck miles driven 
per cow were quite high in the smallest cow-calf operations and 
declined consistently with each enterprise size increase. This is re- 
flected in the per-cow costs of fuels and repairs which were more than 
4.5 times as large in enterprises with less than 100 cows as in the largest 
enterprises. 

The relatively inefficient use of both machinery and facilities in the 
smaller enterprises also is reflected in noncash costs. Noncash com- 
ponents of machinery and facilities ownership costs (replacement 
reserve and interest on investment) totaled $46.24 per cow in the 
smallest enterprises (table 7), $19.18 per cow in enterprises with 500 
to 999 cows (table 10), and $21.77 in enterprises with 1,000 cows or 
more (table 11). A portion of the noncash costs identified as pasture, 
range, hay, and silage costs also represent replacement reserve, and 
interest on investment in machinery used in forage production and 
harvesting. 

The remainder of the noncash feed costs represents the value of 
unpaid operator and family labor. This merely amplifies the identified 



34 

difference in total labor use per cow and the proportionate shift from 
unpaid to hired labor that occurred with each increase in enterprise 
size. Even excluding labor used in feed production, the assigned value 
of unpaid labor declined steadily with increases in enterprise size 
from $40.24 to only $3.22 per cow. This more than offset the reverse 
trend in hired labor costs which ranged from $4.64 to $15.45 per cow. 

Economies of size in feeder-cattle production may be even larger 
than suggested by the data in tables 7 to 11 because the same input 
prices are used in estimating costs within each subregion regardless of 
the size of enterprise. Some price discounts are probably allowed for 
large-quantity purchases of such things as protein supplements and 
fertilizers, although data are not available to verify it. Only if the 
volume of purchases of all farm supplies is large can the producer 
with a small feeder-cattle enterprise usually buy supplies at the same 
prices available to a large volume feeder-cattle producer. 

Offsetting to some unknown extent the probable quantity-purchase 
price advantage of larger producers is the possibility that unpaid 
labor and management may be overpriced in the cost estimates for 
the smaller enterprises. The probability that some unpaid family labor 
could not earn the average hired farm laborer wage rate in alternative 
employment was mentioned above. In addition, operators of smaller 
enterprises may not provide a quality of management worth 7 percent 
of total nonland costs. 

Despite these potential problems, the relationship between enter- 
prise size and production costs in cow-calf enterprises in 1977 is a 
classic example of economies of size (fig. 2). Total nonland costs per 
cow and important subcategories of the total, decline at a declining 
rate with each increase in enterprise size. 

Figure 2. Relationship Between Enterprise Size and Nonland Costs of 
Production for Beef Cow Feeder Cattle Raising Operations* 
Regional Average, 1977 

Dollars per cow 
400 



300 



200 



100 



■mm Total nonland costs 
• ■■■• Cash costs 
HiHiimm Noncash costs 
»«»»■ Feed costs 
•»"■•■ Labor costs 



^'^^^^^^^^k^J^^^J^" mUMIIIimiimil IMIIIMIMIIIIIMMI IIMOIIMI 



50 150 300 700 1500 

Brood cows per herd 

^^ ^™ N* ESCS 50-79 I3> 



35 



REGIONAL DIFFERENCES 



The herd-size distribution of beef cows used to produce feeder calves 
and yearlings varies considerably among the regions. For example, the 
1976 producer survey indicated that enterprises with 1,000 or more 
cows were virtually nonexistent in the North Central region and were 
rare in the Southeast and Great Plains; relatively small proportions 
of the total beef-cow inventories in these regions were included in such 
large herds. At the other extreme, enterprises with fewer than 100 
cows each were estimated to include more than three-fourths of all 
cows in cow-calf enterprises in the North Central region in 1977, 
almost two-thirds of the total in the Southeast, and only one-fourth 
in the West and one-sixth in the Great Plains. Thus, regional differ- 
ences in the costs of production reflect economies of size in varying 
degrees (fig. 2). 

Total nonland production costs in cow-calf enterprises in 1977 varied 
from $217.28 per cow in the Great Plains to $340.27 per cow in the 
North Central region. This was a difference of $122.99 per cow, or 
$40.48 per hundredweight of feeder-cattle sold (tables 15 and 16). 
The difference declined to about $100 per cow, or $33.38 per hundred- 
weight, in 1978 (tables 20 and 21) and is projected to remain virtually 
unchanged in 1979 (tables 25 and 26). Such differences in total pro- 
duction costs can best be analyzed by comparing various components 
of cost and the associated inputs. 

Cash costs 

Total cash costs per cow ranged from a low of $110.92 in the Great 
Plains in 1977 to a high of $172.90 in the North Central region (tables 
12 to 16). Cash costs were less than gross returns per cow in four of 
the five regions. Cash costs in the Southeast, however, exceeded gross 
returns by about $32 per cow. Cash costs in 1978 increased in four 
regions by amounts ranging from less than $1 to more than $7.50 per 
cow; they declined by more than $16.50 in the North Central region 
(tables 17 to 21). Higher cattle prices in 1978 caused gross returns to 
exceed cash costs per cow in every region by at least $49 and average 
about $24 more than total nonland costs in the Great Plains. Projec- 
tions for 1979 indicate that gross returns will again increase more 
rapidly than cash expenses in each region, providing from $105 to $218 
per cow to be applied to specified noncash costs and interest on land 
investment (tables 22 to 26). 



36 



TABLE 12— COSTS AND RETURNS OF COW-CALF ENTERPRISES, ALL SIZES, SOUTHEAST, 1977 1 
[Amount in dollars] 





Costs and returns 
per cow 


Costs and returns per hundredweight feeder sold J 

Supplementary Primary Primary 
enterprise, enterprise, enterprise, 
shortrun* shortrun* longrun* 


Item' 


Cash 


Non- 
cash 


Total 


Non- 
Cash* cash* 


Non- 
Cash 8 cash* 


Cash* 


Non- 
cash * 


RETURNS (per cow) 

Feeder calves (2.393 cwt) 

Feeder yearlings (0.195 cwt) 

Cull cows (1.089 cwt) 


87.52 . 

5.99 

30.16 




87.52 

5.99 

30.16 


J 36.10 

11.65 


36.10 

11.65 


36.10 . 
11.65 . 




Gross returns 


123.67 




123.67 


47.75 


47.75 


47.75 . 








COSTS (per cow) 

Improved pasture (2.182 acres) 

Small grain pasture (0.114 acre) 

Native pasture (1.376 acres) 


40.37 
4.84 
5.36 


10.51 
.89 
2.75 


50.88 
5.73 
8.11 


15.59 

1.87 

2.07 


15.59 

1.87 

2.07 


15.59 
1.87 
2.07 


4.06 

.34 

1.06 


Private range 




C rop residue (0.777 acre) 8 


Rented pasture 


Public grazing .......... . . . . ... . 


Hay (1.233 tons) 


27.59 

.73 

6.88 

6.54 . 

2.36 


7.97 
.31 


35.56 
1.04 
6.88 
6.54 
2.36 


10.65 

.28 

2.66 

2.52 

.91 


10.65 

.28 

2.66 

2.52 

.91 


10.65 

.28 

2.66 . 

2.52 . 

.91 . 


3.08 


Silage (0.063 ton) 


.12 


Grain and concentrate (1.823 cwt) 

Protein supplements (0.681 cwt) 

Salt and minerals (0.304 cwt) 








Subtotal, feed 


94.67 


22.43 


117.10 


36.55 


36.55 


36.55 


8.66 


Veterinary and medicine 


3.97 
.75 
2.48 
9.18 
11.78 




3.97 
.75 
2.48 
9.18 
11.78 


1.53 

.29 

.96 

3.54 

4.55 


1.53 

.29 

.96 

3.54 

4.55 


1.53 . 
.23 . 
.95 . 

3. 51 . 
4.55 . 








Marketings .. 

Fuel, lube, and electricity 




Machinery and building repair 




Subtotal, other production items. 


28.16 




28.16 


10.87 


10.87 


10.87 . 




Hired labor (3.01 hours) 

Interest on operating capital » 


8.2b 
5.22 
7.97 . 


"1.97" 


8.26 
7.19 
7.97 . 


3.19 

2.02 


3.19 

2.02 

3.08 


3.19 . 
2.02 
3.08 . 


""".76 








Total direct costs... 


144.28 


24.40 


168. 68 


52.63 


55.71 


55.71 


9.42 






OWNERSHIP COSTS 

Machinery and equipment, RITI 10 

Buildings and facilities, RITI >» 

Livestock, RITI » 


1.20 
1.30 


16.00 
20.35 
26.32 


17.20 
21.65 
26.32 




.46 

.50 


.46 
.50 


6.18 




7.86 




10.16 


Total ownership costs 


2.50 


62.67 


65.17 




.96 


.96 


24.20 


OTHER COSTS 
Operator and family labor (12.12 


""'8.88" 


33.21 
18.69 


33.21 
18.69 
8.88 




12.82 


"3.43". 

bJ. 10 
113. 
.. -66. 


12.82 


Management 




7.22 


7.22 




3.43 











Total cash and noncash costs.. . 
Total nonland costs ' 3 . 


155.66 


138.97 


294.63 
294. 63 
170.96 


52.63 

52.63 


60.10 2104 

80.14 


53. 65 
76 
01 











Note: See table 1 for footnotes. 



37 

TABLE 13.— COSTS AND RETURNS OF COW-CALF ENTERPRISES ALL SIZES, SOUTHWEST, 1977 i 
[Amount in dollars] 

Costs and returns per hundredweight feeder sold * 



Costs and returns 
per cow 



Supplementary 
enterprise, 
shortrun* 



Primary 
enterprise, 
shortrun* 



Primary 
enterprise, 
longrun* 



Item 2 



Cash 



Non- Non- Non- 

cash Total Cash* cash 8 Cash 8 cash* 



Cash 8 



Non- 
cash 8 



RETURNS (per cow) 

Feeder calves (1.655 cwt) 65.54 65.54 

Feeder yearlings (1.267 cwt) 49.19 49.19 

Cull cows (1.064 cwt) 24.87 



Gross returns. 



39.29 39.29 



DIRECT COSTS (per cow) 
I 

mproved pasture (0.426 acre) 7.10 3.95 11.05 

Small grain pasture (0.516 acre) 2.32 2.32 

Native pasture 



2.43 
.79 



2.43 
.79 



1.26 



3.81 



Private range (6.776 acre) 2. 55 

Crop residue (0.791 acre) 8 

Rented pasture (5.484 acres) 8 15.11 15.11 

Public grazing (1.155 A.M.) 1.63 1.63 

Hay (0.628 ton) 24.15 1.53 25.68 

Silage (0.022 ton) .35 .02 .37 

Grain and concentrate (0.253 cwt) .69 .69 

Protein supplements (2.461 cwt) 17.18 17.18 

Salt and minerals (0.369 cwt) 1.37 1.37 



87 



.87 



5.18 
.56 

8.27 
.12 
.24 

5.88 
.47 



5.18 
.56 

8.27 
.12 
.24 

5.88 
.47 



Subtotal, feed. 



72.45 6.76 79.21 24.81 



24.81 



Veterinary and medicine 3.34 3.34 1.14 

Livestock hauling 7 1.37 1.37 .47 

Marketings 2.75 2.75 .94 

Fuel, lube, and electricity 8.03 8.09 2.77 

Machinery and building repair 10.89 10.89 3.73 



1.14 

.47 

.94 

2.77 

3.73 



Subtotal, other production items- 26.44 26.44 9.05 9.05 



Hired labor (4.52 hours) 12.43 12.43 

Interest on operating capital • 2.98 .67 3.65 

General farm overhead 8.60 8.60 



4.27 
1.02 



4.27 
1.02 
2.94 



Total direct costs 122.90 

OWNERSHIP COSTS 

Machinery and equipment, RITI '• .77 10.18 10.95 

Buildings and facilities, RIT|i» 1.99 31.15 33.14 

Livestock, RITI " 33.62 33.62 



7.43 130.33 39.15 42.09 



Total ownership costs 2.76 74.95 77.71 .94 

OTHER COSTS 

Operator and family labor (8.93 

hours)i 2 24.55 24.55 8.41 

Management 16.28 16.28 5.57 

Land taxes 7.34 7.34 2.51 



39.29 



. 24.87 .... 


.... 24.87 


8.52 


.... 8.52 


.... 8.52 


139.60 .... 


.... 139.60 


47.81 


.... 47.81 ..... 


.... 47.81 



2.43 
.79 



1.35 



87 



.43 



5.18 
.56 

8.27 
.12 
.24 

5.88 
.47 



.52 
.01 



24.81 2.31 



1.14 

.47 

.94 

2.77 

3.73 



9.05 



4.27 
1.02 
2.94 



42.09 



2.54 



3.49 
10.67 
11.51 



.94 25.67 



8.41 
5.57 



2.51 



Total cash and noncash costs... 133.00 123.21 256.21 39.15 45.55 13.98 45.55 42.19 

Total nonland costs is 256.21 39.15 59.53 87.74 

Returns to land and risk -116.61 —39.93 



Note: See table 1 for footnotes. 



38 



TABLE 14.— COSTS AND RETURNS OF COW-CALF ENTERPRISES, ALL SIZES, WEST, 1977 i 
[Amount in dollars] 





Costs and returns 
per cow 


Costs and returns per hundredweight feeder 


sold' 




Supplementary 
enterprise, 
shortrun* 


Primary 
enterprise, 
shortrun * 


Primary 

enterprise, 

longrun* 


Item 2 


Cash 


Non- 
cash 


Total 


Non- 
Cash* cash* 


Cash* 


Non- 
cash 1 


Cash* 


Non- 
cash s 


RETURNS (per cow) 

Feeder calves (1.213 cwt) 

Feeder yearlings (1.851 cwt) 

Cull cows (1.420 cwt) 


50.91 . 
71.47 . 
34. 84 . 




50.91 » 
71.47 ( 
34.84 


39.99 

11.39 


39.99 
11.39 . 




39.99 . 

11.39 . 








Gross returns 


157.22 




157.22 


51.38 


51.38 . 




51.38 . 








DIRECT COSTS (per cow) 

Improved pasture (0.182 acre)... 

Small grain pasture 


4.54 


1.35 


5.89 


1.48 


1.48 . 




1.48 


0.44 






Native pasture --. -- -- - . . . _ _ _ 


Private range (3.164 acres). . 


4.37 


2.15 


6.52 


1.43 


1.43 . 




1.43 


.70 


Crop residue (0.724 acre) 8 




Rented pasture ---- -- - - 


Public grazing (2.394 A.M.). 

Hay (1.928 tons) 


3.62 
75.32 


~"8~U~ 


3.62 
83.46 


1.18 

24.62 


1.18 . 
24.62 . 




1.18 . 
24.62 


"2.66 


Silage 




Grain and concentrate (0.226 cwt) 

Protein supplements (0.414 cwt) 

Salt and minerals (0.372 cwt) 


1.46 . 
3.46 . 
1.65 . 





1.46 
3.46 
1.65 


.48 

1.13 

.54 


.48 .. 

1.13 . 

.54 . 


::::::: 


.48 . 

1.13 . 

.54 . 










Subtotal, feed 


94.42 


11.64 


106. 06 


30.86 


30.86 . 




30.86 


3.80 








Veterinary and medicine 

Livestock hauling 7 

Marketing » 

Fuel, lube, and electricity 


3.13 
.81 
1.22 
7.37 
6.29 




3.13 
.81 
1.22 
7.37 
6.29 


1.02 

.26 

.40 

2.41 

2.06 


1.02 . 

.26 . 

.40 . 
2.41 . 
2.06 . 




1.02 . 

.26 . 

.40 . 
2.41 . 
2.06 . 




Machinery and building repair 










Subtotal, other production items. 


18.82 





18.82 


6.15 


6.15 . 





6.15 . 




Hired labor (3.17 hours) 


9.67 . 

3.93 

7.86 


l7l5~ 


9.67 
5.08 
7.86 . 


3.16 

1.28 


3.16 . 
1.28 . 
2.57 . 




3.16 . 
1.28 
2.57 . 




Interest on operating capital • 


.38 


General farm overhead 














Total direct costs 


134. 70 


12.79 


147. 49 


41.45 


44.02 . 




44.02 


4.18 






OWNERSHIP COSTS 
Machinery and equipment, RITI >° 


.98 
1.08 


13.04 
16.95 
30.48 


14.02 . 

18.03 . 
30.48 . 




.32 . 
.35 . 




.32 
.35 


4.26 


Buildings and facilities, RITI i° 




5.54 


Livestock, RITI u 




9.96 














Total ownership costs. 


2.06 


60.47 


62.53 . 




.67 . 




.67 


19.76 








OTHER COSTS 

Operator and family labor (8.50 
hours) > 2 


"14.80 


25.91 
16.51 


25.91 . 
16.51 . 
14.80 . 






8.47 
5.39 


""~4.~84". 


8.47 


Management 






5.39 


Land taxes 




4.84 . 










Total cash and noncash costs . . 
Total nonland costs ». 


151.56 


115.68 


267. 24 
267. 24 
-110.02.. 


41.45 

41.45 


49. 53 13. 86 
63.39 


49.53 

87.; 

-35.! 


37.80 
33 
?5 













Note: See table 1 for footnotes. 



39 



TABLE 15— COSTS AND RETURNS OF COW-CALF ENTERPRISES, ALL SIZES, GREAT PLAINS, 1977 i 

(Amount in dollars] 



Costs and returns per hundredweight feeder sold J 



Costs and returns 
per cow 



Supplementary 
enterprise, 
shortrun 4 



Primary 
enterprise, 
shortrun* 



Primary 
enterprise, 
longrun* 



Item: 



Cash 



Non- 
cash 



Total Cash * 



Non- 
cash* 



Cash 



Non- 
cash* 



Cash* 



RETURNS (per cow) 

Feeder calves (1.302 cwt) 57.41 57.41 

Feeder yearlings (1.817 cwt) 75.99 75.99 

Cull cows (1.595 c.vt) 35.81 35.81 



42.75 
11.48 



42.75 
11.48 



Gross returns 169.20 169.20 54.23 54.23 



DIRECT COST (per cow) 



Improved pasture... 
Small grain pasture. 
Native pasture 



Private range (10.560 acres) 

Crop residue (1.446 acres)' 

Rented pasture (3.887 acres) 10.01 10.01 

Public grazing (1.639 A.M.) 3.13 3.13 

Hay (1.475 tons) 34.47 5.85 40.32 

Silage (0.566 ton) 4.81 2.06 6.87 

Grain and concentrate (0.800 cwt) 3.09 3.09 

Protein supplements (0.067 cwt) .55 .55 

Salt and minerals (0.360 cwt) 2.21 2.21 



3.21 
1.00 
11.05 
1.54 
.99 
.18 
.71 



Veterinary and medicine 3.79 3.78 1.22 

Livestock hauling : 1.31 1.31 .42 

Marketing? 1.93 1.93 .62 

Fuel, lube, and electricity 7.78 7.78 2.49 

Machinery and building repair 10.27.. . 10.27 3.29 

Subtotal, other production items. 



Hired labor (2.36 hours) 7.09 

Interest on operating capital - 1. 79 

General farm overhead ._ 



Total direct costs. 



1.22 

.42 

.62 

2.49 

3.29 



OWNERSHIP COSTS 

Machinery and equipment. RITI io 1.18 15.61 

Buildings and facilities, RITI "» .77 12.00 

Livestock, RITI n 33. 82 



16.79 
12.77 
33.82 



1.95 61.43 63.38 



Total ownership costs. 
OTHER COSTS 



Operator and family labor (7.57 

hours) u 22.92 

Management 13. 50 

Land taxes 10.94 



63 



42.75 
11.48 



54.23 



3.21 


... 3.21 


1.00 


... 1.00 


L1.05 


... 11.05 


1.54 


... 1.54 


.99 


.99 


.18 


.18 


.71 


.71 



Subtotal, feed 58.27 7.91 66.18 18.68 18.68 18.68 



1.22 
.42 
.62 

2.49 
3.29 



22.92 

13.50. 
10.94 



7.35 
4.33 



3.50 



3.50 



Total cash and noncash costs... 110. 92 106.36 217.28 

Total nonland costs 13 217. 28 

Returns to land and risk —48.08 



29.56 35.55 11.63 

29. 56 47. 23 



Non- 
cash * 



1.87 

.66 



2.53 



. 25.08 . 




25.08 


8.04 


.... 8.04 


.... 8.04 _. 




7. 09 . 
1.79 
5.80 . 


"VhT 


7.09 
2.39 
5.80 . 


2.27 

.57 


... 2.27 

.57 

.... 1.86 


.... 2.27 .. 

.57 
.... 1.86 .. 


______ 










. 98.03 


8.51 


106. 54 


29.56 


. 31.42 


... 31.42 


2.72 



38 5.00 
25 3.85 
.... 10.84 



.63 19.69 



7.35 
4.33 



35.55 34.09 

69.64 
.. -15.41 



Note: See table 1 for footnotes. 



40 



TABLE 16.— COSTS AND RETURNS OF COW-CALF ENTERPRISES, ALL SIZES, NORTH CENTRAL 1977 » 

[Amount in dollars] 





COSt! 


tand returns 
per cow 


Costs and returns per hundredweight feeder sold' 




Supplementary 
enterprise, 
shortrun* 


Primary 
enterprise, 
shortrun* 


Primary 
enterprise, 

Icngrun * 


Items 


Cash 


Non- 
cash 


Total 


Non- 
Cash' cash* 


Cash* 


Non- 
cash* 


Cash« 

40. 19 
11.48 _ 


Non- 
cash * 


RETURNS (per cow) 

Feeder calves (1.706 cwt) 

Feeder yearlings (1.386 cwt). 


68.34 . 
55 85 . 
35.47 . 




68.34 ) 

55.85 

35.47 


40.19 

11.48 


40.19 . 
11.48 . 






Cull cows (1.312 cwt) 




Gross returns 


159.66 . 




159. 66 


51.67 


51.67 . 




51.67 . 








DIRECT COSTS (per cow) 

Improved pasture (2.301 acres) 

Small grain pasture (0.017 acre) 

Native pasture (1.604 acres). ... _ 


29.90 

.29 

2.02 


14.15 

.15 

2.02 


44.05 

.44 

4.04 


9.68 

.09 

.65 


9.68 . 
.03 . 
.65 . 





9.63 
.03 
.65 


4.58 
.05 

.65 






Crop residue (1.436 acres)^ 


Rented pasture -__.__—____- .. .__ .. . . 


Public grazing ... __ .. . .... 


Hay (1.685 tons) 


39.15 

5.37 
15.62 . 

5.34 . 

4.92 . 


12.93 
4.20 


52.08 
9.57 

15.62 
5.34 
4.92 


12.67 

1.74 

5.06 

1.73 

1.59 


12.67 . 
1.74 . 
5.06 . 
1.73 . 
1.59 . 




12.67 
1.74 
5.05 . 
1.73 . 
1.59 . 


4.18 


Silage (0.581 ton)... 




1.36 


Grain and concentrate (4.025 cwt) 




Protein supplements (0.532 cwt) 

Salt and minerals (0.719 cwt) 






Subtotal, feed 


102.61 


33.45 


136. 06 


33.21 


33.21 . 




33.21 


10.82 


Veterinary and medicine. . ... 


3.95 . 
.96 . 
2.03 . 
9.66 . 
16.69 . 




3.95 
.96 
2.03 
9.66 
16.69 


1.28 

.31 

.66 

3.12 

5.40 


1.28 . 

.31 . 

.66 . 
3.12 . 
5.40 . 




1.23 . 

.31 . 

.66 . 
3.12 . 
5.40 . 




Livestock hauling 




Marketing ' 

Fuel, lube, and electricity 




Machinery and building repair.. 




Subtotal, other production items . 


. 33.29 




33.29 


10.77 


10.77 . 




10.77 




Hired labor (0.94 hour) 


2.66 . 
5.33 
8.66 . 


~~2.~34~ 


2.66 
7.67 
8.66 . 


.86 

1.73 


.86 . 
1.73 . 
2.80 . 




.86 . 
1.73 
2.80 . 




Interest on operating capital 9 


.76 










152. 55 


35.79 


188. 34 


46.57 


49. 37 . 




49.37 


11.58 








OWNERSHIP COSTS 

Machinery and equipment, RITI 10 

Buildings and facilities, RITI > .. 


.92 
2.19 


12.22 

34.23 
29.72 


13.14 
36.42 
29.72 




.30 
.71 . 




.30 
.71 


3.95 




11.08 


Livestock, RITI » 




9.62 
















3.11 


76.17 


79.28 




1.01 . 




1.01 


24.65 








OTHER COSTS 

Operator and family labor (12.10 

hours) 12 

Management 


17.24" 


34.28 
21.13 


34.28 
21.13 
17.24 






11.03 
6.84 


"5.58". 


11.09 




"""5.58". 


6.84 








Total cash and noncash costs 
Total nonland costs 13 .. 


. 172. SO 


167. 37 


340. 27 

340. 27 

-180.61 


46.57 

46.57 


55. £6 17.93 
73.89 


55.96 
110. 
-58. 


54. 16 
12 
45 













Note: see table 1 for footnotes. 



41 



TABLE 17.-C0STS AND RETURNS OF COW-CALF ENTERPRISES, ALL SIZES, SOUTHEAST, 1978 
[Amount in dollars] 





Costs and returns 
per cow 


Costs and returns per hundredwei 

Supplementary Primary 
enterprise, enterprise, 
shortrun* shortrun* 


ght feeder sold 3 

Primary 
enterprise, 
longrun* 


Item 2 


Cash 


Non- 
cash 


Total 


Non- 
Cash* cash* 


Cash* 


Non- 
cash* 


Cash* 


Non- 
cash ' 


RETURNS (per cow) 

Feeder calves (2.393 cwt) 

Feeder yearlings (0.195 cwt) 


. 153.57 

8.88 

42.75 




153.57 i 
8.88 ) 
42.75 


[ 62.72 

16.51 


62.72 . 

16.51 . 




62.72 . 

16.51 . 




Cull cows (1.089cwt) 




Gross returns 


205.20 




205.20 


79.23 


79.23 . 




79.23 . 




DIRECT COSTS (per cow) 
Improved pasture (2.182 acres) 


41.58 
5.00 
5.66 


10.83 

.92 

2.90 


52.41 
5.92 
8.56 


16.05 

1.93 

2.19 


16.05 . 
1.93 .. 
2.19 .. 




16.05 
1.93 
2.19 


4.18 


Small grain pasture (0.114 acre) 

Native pasture (1.376 acres). - 





.36 
1.12 


Private range. 




Crop residue (0.777 acre) 6 


Rented pasture . ... . ... ... . ...... 


Public grazing .. . .... 


Hay (1.100 tons).. 


22.10 
.53 
7.11 
5.76 . 
2.61 . 


8.85 
.27 


30.95 
.85 
7.11 
5.76 
2.61 


8.53 

• .22 

2.75 

2.22 

1.01 


8.53 
.22 
2.75 
2.22 
1.01 . 




8.53 
.22 
2.75 . 
2.22 . 
1.01 . 


3.42 


Silage (0.063 ton) 


.10 


Grain and concentrate (1.823 cwt) 

Protein supplements (0.681 cwt) 

Salt and minerals (0.304 cwt) . 










Subtotal, feed 


90.40 


23.77 


114.17 


34.90 


34.90 . 




34.90 


9.18 








Veterinary and medicine 

Livestock hauling ".. .. .. 


4.10 . 

.78 
2.65 
9.57 . 
12.67 




4.10 

.78 
2.65 
9.57 
12.67 


1.58 

.30 

1.02 

3.70 

4.89 


1.58 . 
.30 
1.02 . 
3.70 . 
4.89 . 




1.58 . 
.30 . 
1.02 . 
3.70 . 
4.89 . 




Marketings 

Fuel, lube, and electricity 




Machinery and building repair 












Subtotal, other production items 


29.77 . 




29.77 


11.49 


11.49 . 




11.49 .. 










Hired labor (3.23 hours) 


9.60 . 

5.33 

8.52 


"Y.35 


9.60 
7.63 
8.52 . 


3.71 

2.06 


3.71 . 
2.06 . 
3.29 . 




3.71 .. 
2.06 
3.29 . 




Interest on operating capital 9 




.91 


General farm overhead . .. 












Total direct costs . 


143.62 


26.12 


169. 74 


52.16 


55.45 . 




55.45 


10.09 








OWNERSHIP COSTS 
Machinery and equipment, RITI 10 


1.35 

1.40 


17.92 
21.85 
33.07 


19.27 . 
23.25 . 
33.07 




.52 . 
.54 . 




.52 
.54 


6.92 


Buildings and facilities, RITI >° 




8.43 


Livestock, RITI " 




12. .7 














Total ownership costs 


2.75 


72.84 


75.59 . 




1.C6 . 




1.06 


28.12 








OTHER COSTS 

Operator and family labor (11.5 
hours). ... . 


15 
~~~9.~79~ 


35.90 
19.66 


35.50 . 
19.66 
9.79 . 






13.71 
7.59 


"T78~\ 


13.71 


Management. . ... 






7.59 


Land taxes 




3.78 . 










Total cash and noncash costs... 
Total nonland costs ' 3 

Returns to land and risk.. 


156.16 


154.12 


310.28 
310.28 
-105.08. 


52.16 

52.16 


60.29 
81. 


21.30 
59 


60.29 
119. 

-40. 


59.51 
80 
57 













Note: See table 1 for footnotes. 



42 

TABLE 18.— COSTS AND RETURNS OF BEEF COW-FEEDER CATTLE RAISING ENTERPRISES, ALL SIZES, SOUTHWEST, 

19781 

[Amount in dollars] 



Costs and returns 
per cow 



Item 2 



Cash 



Non- 
cash 



Costs and returns per hundredweight feeder sold 3 



Supplementary 
enterprise, 
shortrun 4 



Total Cash i 



Non- 
cash* 



Primary 
enterprise, 
shortrun* 



Cash* 



Non- 
cash 5 



Primary 
enterprise, 
longrun* 



Cash* 



Non- 
cash » 



RETURNS (per cow) 

Feeder calves (1.655 cwt) 110.60 110.60) 

Feeder yearlings (1.267 cwt) 73.87 73.87) 

Cull cows (1.064 cwt) 35.82 35.82 



63.17 
12.27 



63.17 63.17 

12.27 12.27 



Grossreturns 220.29 220.29 75.44 75.44 



75.44 



DIRECT COSTS (per cow) 

Improved pasture (0.426 acre) 7.49 4.22 11.71 

Small grain pasture (0.516 acre) 2.53 2.53 

Native pasture 



2.57 
.87 



2.57 
.87 



1.36 



4.11 



Private range (6.776 acres) 2. 75 

Crop residue (0.791 acre) 6 

Rented pasture (5.484 acres) 15.41 15.41 

Pubtic grazing (1.155 A.M.) 1.63 1.63 

Hay(0.628ton) 24.87 1.65 26.52 

Silage (0.022 ton) .28 .02 .30 

Grain and concentrate (0.253 cwt) .71 .71 

Protein supplements (2.461 cwt) 15.14 15.14 

Salt and minerals (0.369 cwt) 1.52 1.52 



94 



91 



5.28 
.56 

8.52 
.09 
.24 

5.18 
.52 



5.23 
.56 

8.52 
.09 
.24 

5.18 
.52 



Veterinary and medicine. 3.45 3.45 

Livestock hauling 7 1.43 1.43 

Marketing' 2.94 2.94 

Fuel, lube, and electricity 8.43 8.43 

Machinery and building repair 11.72 11.72 



1.18 
.49 
1.01 
2.89 
4.01 



1.18 
.49 
1.01 
2.89 
4.01 



Subtotal, other production items. 27.97 27.97 9.58 



9.58 



Hired labor (4.52 hours) 13.47 

Interest on operating capital 9 3. 10 

General farm overhead 9. 19 



13.47 
3.98 
9.19 



4.61 
1.06 



4.61 
1.06 
3.15 



Total direct costs 126J 



8.13 134.19 40.02 43.17 



OWNERSHIP COSTS 



2.57 
.87 



.91 



5.23 
.56 

8.52 
.09 
.24 

5.18 
.52 



Subtotal, feed 72.33 7.25 79.58 24.77 24.77 24.77 



1.18 
.49 
1.01 
2.89 
4.01 



9.58 



4.61 
1.06 
3.15 



43.17 



1.44 



2.48 



30 



2.78 



Machinery and equipment, RITI'O .86 11.42 12.28 

Buildings and facilities, RITI i° 2.14 33.45 35.59 

Livestock, RITI" 41.50 41.50 



Total ownership costs 3.00 

OTHER COSTS 

Operator and family labor (8.93 hours) u 26. 61 

Management 17. 51 

Landtaxes. ... 8. 10 



86. 37 89. 37 



26.61 
17.51 
8.10 



1.03 



2.77 



.23 

.73 



Total cash and noncash costs 137.16 138.62 275.78 

Total nonland costs " ..275.78 

Returns to land and risk . ..... ..-55.49 



40.02 .. . 
40.02 



46.97 15.11 
62.03 



3.91 
11.46 
14.21 



1.03 29.58 



9.11 9.11 

6.00 6.00 

2.77 



46.97 47.47 
91.44 
-19.00 



Note : See table 1 for footnotes. 



43 



TABLE 19.— COSTS AND RETURNS OF COW-CALF ENTERPRISES, ALL SIZES, WEST, 1978 » 
(Amount in dollars] 



Costs and returns 
per cow 



Item 2 



Cash 



Non- 
cash 



Costs and returns per hundredweight feeder sold 3 



Supplementary 
enterprise, 
shortrun* 



Total Cash » 



Non- 
cash* 



Primary 
enterprise, 
shortrun* 



Primary 
enterprise, 
longrun * 



Cash* 



Non- 
cash* 



Cash* 



Non- 
cash * 



RETURNS (per cow) 

Feeder calves (1.213 cwt) 82.76 82.76 

Feeder yearlings (1.851 cwt) 112.93 112.93 

Cull cows (1.420 cwt) 



Gross returns 

DIRECT COSTS (per cow) 



1.43 
"l. 30" 



6.21 
6.98* 



Improved pasture (0.182 acre) 4. 78 

Small grain pasture 

Native pasture 

Private range (3.164 acres) 4.63 

Crop residue (0.724 acre) 5 

Rented pasture 

Public grazing (2.394 A.M.) 3.62 3.62 

Hay (1.^28 tons) 78.20 8.77 86.97 

Silage 



1.56 .. 

"i.~53~:" 



1.56 
1. 53" 



1.18 1.18 

25.56 2x 56 



. 48.43 .... 


.... 48.43 


15.83 .... 


.... 15.83 .... 


.... 15.83 ... 




. 244.12 .... 


.... 244. 12 


79.78 .... 


.... 79.78 


.... 79.78 ... 





1.56 



1.53 



1.18 
2 j. 56 



0.47 



75 



Grain and concentrate (0.226 cwt) .... 1.51 1.51 .43 

Protein supplements (0.414 cwt) 3.0i 3.05 1.00 

Salt and minerals (0.372 cwt) 1.82 1.82 .59 



.49 

1.00 
.59 



Subtotal, feed 97.66 12.50 110.16 31.91 



31.91 



Veterinary and medicine 3.23 3.23 1.06 

Livestock hauling 7 .84 .84 .27 

Marketing^ 1.30 1.30 .43 

Fuel, lube, and electricity 7.68 7.68 2.51 

Machinery and building repair 6.77 6.77 2.21 



1.06 

.27 

.43 

2.51 

2.21 



Subtotal, other production items. 19.82 19.82 6.48 6.48 



Hired labor (3.17 hours) 10.48 

Interest on operating capital » 4. 31 

General farm overhead 8.40 



1.31 



10.48 
5.62 
8.40 



3.42 
1.41 



3.42 
1.41 
2.75 



Total direct costs 140.67 

OWNERSHIP COSTS 

Machinery and equipment, RITI i° 1.10 14.63 

Buildings and facilities, RITI io 1. 16 18.18 

Livestock, RITI u 39.82 



13.81 154.48 43.22 45.97 



15.73 
19.34 
39.82 



Total, ownership costs 2.26 

OTHER COSTS 

Operator and family labor (8.50 

hours) 12 28.09 

Management 18.02 

Land taxes 16.30 



72.63 74.89 



.49 

1.00 
.59 



31.91 



1.06 

.27 

.43 

2.51 

2.21 



6.48 



3.42 
1.41 
2.75 



45.97 



.36 
.38 



43 



4.51 



4.78 
5.94 
13.02 



23.74 



28.09 
18.02 
16.30 



9.18 
5.89 



9.18 
5.89 



5.32 



5.32 



Total cash and noncash costs. .. 159. 23 132. 55 291. 78 

Total nonland costs 13 291.78 

Returns to land and risk -47.66 



43.22 ... 
43.22 



52.03 15.07 
67.10 



52. 03 43. 32 
95.35 
-15.57 



Note: See table 1 for footnotes. 



44 



TABLE 20.-COSTS AND RETURNS OF COW-CALF ENTERPRISES, ALL SIZES, GREAT PLAINS, 1978 

[Amount in dollars] 



Costs and returns per hundredweight feeder sold 3 



Costs and returns 
per cow 



Supplementary 
enterprise, 
shortrun* 



Primary 
enterprise, 
shortrun 4 



Primary 
enterprise, 
longrun* 



Item 2 



Cash 



Non- 
cash 



Total Cash * 



Non- 
cash * 



Cash* 



Non- 
cash* 



Cash J 



RETURNS (per cow) 

Feeder calves (1.302 cwt) 92.89 92.89 

Feeder yearlings (1.817 cwt) 120.46 120.46 

Cull cows (1.595 cwt) 49.78 49.78 



68.38 
15.96 



68.38 68.38 

15.96 15.96 



Gross returns 263.13 263.13 84.34 84.34 



DIRECT COSTS (per cow) 



Improved pasture.. 
Small grain pasture. 
Native pasture 



Private range (10.560 acre)... 

Crop residue (1.446 acre) 9 

Rented pasture (3.887 acres) 10.21 10.21 

Public grazing (1.639 A.M.) 3.13 3.13 

Hay (1.475 ton) 36.82 6.30 43.12 

Silage (0.566 ton) 3.92 1.68 5.60 

Grain and concentrate (0.800 cwt) 3.20 3.20 

Protein supplements (0.067 cwt) .48 .48 

Salt and minerals (0.360 cwt) 2.44.. 2.44 



3.27 
1.00 
11.80 
1.26 
1.03 
.15 
.78 



3.27 
1.00 
11.80 
1.26 
1.03 
.15 
.78 



Subtotal, feed 60.20 



18 19.29 



Veterinary and medicine 3.92 3.92 1.26 

Livestock hauling 7 1.36 1.36 .44 

Marketing* 2.06 2.06 .66 

Fuel, lube, and electricity 8.11.. 8.11 2.60 

Mechinery and building repair 11.06 11.06 3.54 



1.26 

.44 

.66 

2.60 

3.54 



Subtotal, other production items. 26.51 26.51 8.50 8.50 



Hired labor (2.36 hours) 7.69 7.69 2.46 

Interest on operating capital » 1.91 .67 2.58 .61 

General farm overhead 6.20 6.20 



Total direct costs 102.51 

OWNERSHIP COSTS 

Machinery and equipment, RITI >° 1.32 17.52 18.84 

Buildings and facilities, RITI io .82 12.87 13.69 

Livestock, RITI ii 43.97 43.97 



8.65 111.16 30.86 32.85 



76.50 



Total ownership costs 2.14 74.36 

OTHER COSTS 

Operator and family labor (7.57 

hours)'* 24.85 24.85 

Management 14.88 14.88 

Landtaxes 11.83 11.83 



69 



84.34 



3.27 
1.00 
11.80 
1.26 
1.03 
.15 
.78 



19.29 19.29 



1.26 

.44 

.66 

2.60 

3.54 



50 



2.46 

.61 

1.99 



2.46 
.61 
1.99 



32.85 



.43 
.26 



69 



3.79 



Total cash and noncash costs ... 116. 48 122.74 239.22 30.86 

Total nonland costs » 239.22 30.86 

Returns to land and risk 23.91 



Non- 
cash * 



2.02 
.54 



2.56 



21 



2.77 



5.62 
4.12 
14.09 



23.83 



7.97 7.97 

4.77 4.77 

3.79 



37.33 12.74 37.33 39.34 

50. 07 76. 67 
7.67 



Note: See table 1 for footnotes. 



45 



TABLE 21.— COSTS AND RETURNS OF COW-CALF ENTERPRISES, ALL SIZES, NORTH CENTRAL, 1978 

[Amount in dollars) 



Costs and returns 
per cow 



Item 2 



Cash 



Non- 
cash 



Costs and returns per hundredweight feeder sold * 



Supplementary 
enterprise, 
shortrun* 



Total Cash * 



Non- 
cash* 



Primary 
enterprise, 
shortrun* 



Primary 
enterprise, 
longrun* 



Cash* 



Non- 
cash* 



Cash* 



Non- 
cash » 



RETURNS (per cow) 

Feeder calves (1.706 cwt) 116.69 116.69 

Feeder yearlings (1.3£6 cwt) 75.16 75.16 

Cull cows (1.312 cwt) 49.94 49.94 



62.09 
16.16 



62.09 62.09 

16.16 16.16 



Gross returns. 



241.79 241.79 78.25 78.25 



78.25 



DIRECT COSTS (per cow) 

Improved pasture (2.301 acres) 30.73 15.13 

Small grain pasture (0.017 acre) .31 .16 

Native pasture (1.604 acres) 2.18 2.18 

Private range 



45.86 

.47 

4.36 



9.94 
.10 
.70 



Crop residue (1.436 acres) 8 . 

Rented pasture 

Public grazing. 



Hay (1.480 tons) 17.98 13.56 31.54 5.82 

Silage (0.581 ton) 4.29 3.51 7.80 1.39 

Grain and concentrate (4.025 cwt) 16.15 16.15 5.23 

Protein supplements (0.532 cwt) 4.70 4.70 1.52 

Salt and minerals (0.719 cwt) 5.44 5.44 1.76 



Subtotal, feed 81.78 34.54 116.32 26.46 



Veterinary and medicine 4.08 4.08 1.32 

Livestock hauling : 1.00 1.00 .32 

Marketings 2.17 2.17 .70 

Fuel, lube, and electricity 10.07 10.07 3.26 

Machinery and building repair 19.59 19.59 6.34 



Hired labor (0.91 hour)... 2.80 2.80 

Interest on operating capital • 4.70 2.48 7.18 

General farm overhead 8.20 8.20 



.91 
1.52 



Total direct costs 134.39 37.02 171.41 

OWNERSHIP COSTS 

Machinery and equipment, RITI io 1.03 13.73 14.76 

Buildings and facilities, RITI io 2.36 36.96 39.32 

Livestock, RITI ii 37.78 37.78 



40.83 



3.39 88.47 91. 



Total ownership costs. 
OTHER COSTS 



Operator and family labor (12.13 

hours)" 37.24 37.24 

Management 21.04 21.04 

Land taxes 18.51 18.51 



9.94 
.10 
.70 



9.94 
.10 
.70 



5.82 
1.39 
5.23 
1.52 
1.76 



5.82 
1.39 
5.23 
1.52 
1.76 



26.46 



1.32 

.32 

.70 

3.26 

6.34 



1.32 

.32 

.70 

3.26 

6.34 



Subtotal, other production items. 36.91 36.91 11.94 11.94 11.94 



.91 
1.52 
2.66 



.91 
1.52 
2.66 



43.49 



.33 
.77 



.33 
.77 



L. 10 



5.99 



4.90 
.05 
.71 



4.39 
1.13 



26.46 11.18 



80 



43.49 11.98 



4.44 
11.96 
12.23 



1. 10 28.63 



12.05 12.05 

6.81 6.81 

5.99 



Total cash and noncash costs... 156.29 183.77 340.06 40.83 50.58 18.86 50.58 59.47 

Total nonland costs i' 340.06 40.83 69.44 110.05 

Returns to land and risk -98.27 -31.80 



Note: See table 1 for footnotes. 



46 



TABLE 22.— COSTS AND RETURNS OF COW-CALF ENTERPRISES, ALL SIZES, SOUTHEAST, 1979 » 

[Amount in dollars] 



'Costs and returns per hundredweight feeder sold 



Costs and returns 
per cow 



Supplementary 
enterprise, 
shortrun* 



Primary 
enterprise, 
shortrun* 



Primary 
enterprise, 
longrun* 



Items 



Cash 



Non- 
cash 



Total Cash* 



Non- 
cash* 



Cash* 



Non- 
cash' 



Cash 



RETURNS (per cow) 

Feeder calves (2.393 cwt) 198.10 _ 198.10 

Feeder yearlings (0.195 cwt) 11.46 _ 11.46 

Cull cows (1.089 cwt) 58.14 58.14 



80.91 80.91 

22.45 22.45 



80.91 
22.45 



Gross returns 267.70 267.70 103.36 103.36 



103. 36 



DIRECT COSTS (per cow) 

Improved pasture (2.182 acres) 43.75 11.40 55.15 16.89 

Small grain pasture (0.114 acre) 5.47 1.01 6.48 2.11 

Native pasture (1.376 acres) 5.99 3.07 9.06 2.31 

Private range 



16.89 
2.11 
2.31 



16.89 
2.11 
2.31 



Crop residue (0.777 acre) 8 . 
Rented pasture 

Public grazing. 



Hay (1.100 tons) 17.25 9.30 26.55 6.66 

Silage (0.063 ton) .60 .28 .88 .23 

Grain and concentrate (1.823 cwt) 8.06 8.06 3.11 

Protein supplements (0.681 cwt) 6.30 6.30 2.44 

Salt and minerals (0.304 cwt) 2.86 2.86 1.11 



6.66 
.23 
3.11 
2.44 
1.11 



Subtotal, feed 90.28 25.06 115.34 34.86 34.86 34.86 



Veterinary and medicine 4.31 4.31 1.66 

Livestock hauling? .88 .88 .34 

Marketings 2.81 2.81 1.08 

Fuel, lube, and electricity 11.52 11.52 4.45 

Machinery and building repair 13.59 13.59 5.25 



1.66 
.34 
1.08 
4.45 
5.25 



1.66 
.34 
1.08 
4.45 
5.25 



Subtotal, other production items. 33.11 33.11 12.78 12.78 



12.78 



Hired labor (3.23 hours) 10.3d 

Interest on operating capital » 6.43 

General farm overhead 9. 05 



10.38 
9.27 
9.05 



4.00 
2.48 



4.00 
2.48 
3.50 



4.00 
2.48 
3.50 



Total direct costs ....149 25 27.90 177.15 54.12 

OWNERSHIP COSTS 



Machinery and equipment, RITI io 1.53 20.27 21.80 

Buildings and facilities, RITI »o 1.49 23.35 24.84 

Livestock, RITI H 46.22 46.22 



Operator and family labor (11.95 

hours)i2 38.38 38.38 14.81 

Management 21.59 21.59 8.34 

Landtaxes 10.67 10.67 4.12. 



4.12 



Non- 
cash * 



4.40 
.19 
1.18 



6. 66 3. 59 

.23 .11 

3.11 

2.44 

1.11 



9.68 



1.10 



57.62 57.62 10.78 



7.83 
9.01 
17.85 



Total ownership costs 3.02 89.84 92.86 1.17 1.17 34.68 

OTHER COSTS 



14.81 
8.34 



Total cash and noncash costs _ 162.94 177.71 340.65 54.12 62.91 23.15 62.91 68.61 

Total nonland costs 13 ....340.65 54.12 86.06 131.52 

Returns to land and risk -72.95 -28. 16 



Note: See table 1 for footnotes. 



47 



TABLE 23.-COSTS AND RETURNS OF COW-CALF ENTERPRISES, ALL SIZES, SOUTHWEST, 1979 
[Amount in dollars] 





Costs and returns 
per cow 


Costs and returns per hundredweight feeder sold* 

Supplementary Primary Primary 
enterprise, enterprise, enterprise, 
shortrun* shortrun* longrun* 


Item 2 


Cash 


Non- 
cash 


Total 


Non- 
Cash* cash* 


Cash* 


Non- 
cash* 


Cash* 


Non- 
cash * 


RETURNS (per cow) 
Feeder calves (1.655 cwt) 


. 142.67 
95.29 
48.72 




142.67 
95.29 
48.72 


} 81.49 

16.69 


81.49 . 
16.69 . 




81.49 .. 
16.69 .. 




Feeder yea lings (l.?67 cwt) . ... 




Cull cows (1.064 cwt). 










Gross returns 


286. 68 




268. 68 


98.18 


98. 18 . 




98.18 .. 








DIRECT COSTS (per cow) 

lmn'-«"eH nast'ire (0.426 acre) 

Small grain pasture (0.516 acre) 


8.40 
2.93 . 


4.72 


13.12 
2.93 


2.88 

1.00 


2.88 . 
1.00 .. 




2.88 
1.00 .. 


1.62 


Native pasture . 








Private range (6.776 acres). .. 


3.17 


1.56 


4.73 


1.09 


1.09 .. 





1.09 


.53 


Crop residue (0.791 acre) 8 . 




Rented pasture (5.481 aces)... 


15.87 . 

1.63 . 

24.79 

.29 

.80 . 

16.56 . 

1.67 . 


" T83~ 
.02 


1 .87 

1.63 

26.67 

.31 

.80 

16.56 

1.6' 


5.43 

.56 

8.49 

.10 

.28 

5.67 

.57 


5.43 .. 

.56 .. 
8.49 .. 

.10 .. 

.28 . 
5.67 . 

.57 . 




5.43 .. 




Public grazing (1.155 A.M.) 

Hay (0.628 ton) 




.56 - 
8.49 

.10 

.28 .. 
5.67 .. 

.57 .. 


""64 


Silage (0.022 ton) 





.01 


Grain and concentrate (0.253 cwt) 

Protein supplements ('.461 cwt) 




Salt and minerals (0.369 cwt) 












76.11 


8.18 


84.29 


26.07 


26.07 . 




26.07 


2.80 








Veterinary and medicine 

Livestock hauling ' 

Marketings 

Fuel, lube, and electricity 

Machinery and building repair 


3.63 

1.61 

3.12 

10.15 

12.54 




3.63 

1.61 

3.12 

10.15 

12.54 


1.24 

.55 

1.07 

3.48 

4.29 


1.24 . 
.55 . 
1.07 . 
3.48 . 
4.29 . 




1.24 .. 
.55 .. 

1.07 .. 
3.48 .. 
4.29 .. 




Subtotal, other production items 


31.05 




31.05 


10.63 


10.63 . 




10.63 .. 










Hired labor (4.52 hours) 


14.56 . 
3.74 
9.76 . 


"1.06" 


14.56 
4.80 
9.76 . 


4.99 

1.28 


4.99 . 
1.28 . 
3.34 _. 




4.99 .. 
1.28 
3.34 .. 




Interest on operating capital 9 

General farm overhead... 





.36 










Total direct costs.. 


135. 22 


9.24 


144 46 


42.9/ 


46 31 . 




46.31 


3.16 






OWNERSHIP COSTS 
Machinery and equipment, RITI 10 


.98 
2.29 


13.05 
35.80 
61.27 


14.03 . 
38.09 . 
61.27 . 




.34 . 
.78 . 




.34 
.78 


4.47 


Buildings and facilities, RITI 10 




12.26 


Livestock, RITI " 




20.98 
















3.27 


110.12 


113.39 . 




1.12 . 




1.12 


37.71 








OTHER COSTS 

Operator and family labor (8.93 hours) 12 
Management 


"8.83" 


28.76 
20.06 


28.76 . 

20.06 . 

8.83 . 






9.85 . 
6.87 . 


"3."02\- 


9.85 






6.87 






3.02 . 










Total cash and noncash costs.. . 

Total nonland costs 13 

Returns to land and risk 


147.32 


168. 18 


315.50 
315.50 
-28.82 


42.97 

42.97 


50.45 16.72 
67.17 


50.45 
108. C 
-9.i 


57.59 

14 
16 

















Note: See table 1 for footnotes. 



48 



TABLE 24.— COSTS AND RETURNS OF COW-CALF ENTERPRISES, ALL SIZES, WEST, 1979 i 
[Amount in dollars] 



Costs and returns per hundredweight feeder sold 3 



Costs and returns 
per cow 



Supplementary 
enterprise, 
shortrun< 



Primary 
enterprise, 
shortrun* 



Primary 
enterprise, 

longrun* 



Item 2 



Cash 



Non- Non- Non- 

cash Total Cash* cash* Cash* cash* Cash* 



RETURNS (per cow) 

Feeder calves (1.213 cwt)... 106.76 106.76 

Feeder yearlings (1.851 cwt) 145.68 145.68 

Cull cows (1.420 cwt) 65.86 65.86 '21.52 



82.50 82.50 

... 21.52 



Gross returns 318.30 

DIRECT COSTS (per cow) 

Improved pasture (0.182 acre) 5.07 1.52 6.59 

Small grain pasture 

Native pasture (3.164 acres) 

Private range (0.724 acre) 4.98 2.45 7.43 

Crop residue 8 . 



318.30 104.02 



1.65 
1.63" 



1.65 
Y.S3 



Rented pasture 

Public grazing (2.394 A.M.) 3.62 3.62 

Hay (1.928 tons) 77.50 9.42 86.92 

Silage. 



1.18 
25.33 



1.18 
25.33 



82.50 
21.52 



104.02 104.02 



1.65 
T63~ 



1.18 
25.33 



Non- 
cash ' 



0.50 
""."80 



Grain and concentrate (0.225 cwt) 1.71 1.71 .56 

Protein supplements (0.414 cwt) 3.34 3.34 1.09 

Salt and minerals (0.372 cwt) 1.99 1.99 .65 



.56 

1.09 
.65 



Subtotal, feed 98.21 13.39 111.60 32.09 



32.09 



Veterinary and medicine 3.40 3.40 1.11 

Livestock hauling 7 .94 .94 .31 

Marketings 1.38 1.38 .45 

Fuel, lube, and electricity 9.25 9.25 3.02 

Machinery and building repair 7.25 .. 7.25 2.37 



1.11 

.31 

.45 

3.02 

2.37 



Subtotal, other production items. 22.22 22.22 7.26 7.26 



Hired labor (3.17 hours) 11.33 

Interest on operating capital » 5.20 

General farm overhead.. 8.92 



1.58 



11.33 
6.78 
8.92 



3.71 
1.70 



3.71 
1.70 
2.92 



14.97 160.85 44.76 



Total direct costs 145. 

OWNERSHIP COSTS 

Machinery and equipment, RITI io 1.25 16.67 17.92 

Buildings and facilities, RITM» „ 1.25 19.53 20.78 

Livestock, RITI ii 59.29 59.29 



.41 
.41 



.82 



.56 
1.09 
.65 



32.09 



1.11 

.31 

.45 

3.02 

2.37 



7.26 



3.71 
1.70 
2.92 



47.68 47.68 



.41 

.41 



Total ownership costs 2.50 95.49 97.99 

OTHER COSTS 

Operator and family labor (8.50 

hours)i2..._ 30.36 30.36 9.92 

Management 20.24 20.24 6.61 

Landtaxes 17.77 17.77 5.80 



.82 



4.38 



4.89 



5.45 
6.38 
19.38 



31.21 



9.92 
6.61 



5.80 



Total cash and noncash costs... 166.15 161.06 327.21 44.76 51.30 16.53 54.30 52.63 

Total nonland costs '3 327.21 44.76 70.83 106.93 

Returns to land and risk —3.91 —2 91 



Note: See table 1 for footnotes. 



49 

TABLE 25.— COSTS AND RETURNS OF COW-CALF ENTERPRISES, ALL SIZES, GREAT PLAINS, 1979 ' 

[Amount in dollars] 



Costs and returns per hundredweight feeder sold 1 



Costs and returns 
per cow 



Supplementary 
enterprise, 
shortrun 4 



Primary 
enterprise, 
shortrun* 



Primary 
enterprise, 
longrun 4 



Item 2 



Cash 



Non- 
cash 



Total Cash * 



Non- 
cash* 



Cash* 



Non- 
cash* 



Cash* 



RETURNS (per cow) 

Feeder calves (1.302 cwt) 119.83 119.83 

Feeder yearlings (1.817 cwt) 155.39 155.39 

Cull cows (1.595 cwt) 67.70 67.70 



88.21 
21.70 



88.21 
21.70 



Gross returns 342.92 342.92 109.91 109.91 



DIRECT COSTS (per cow) 



Improved pasture. . 
Small grain pasture. 
Native pasture 



Private range (10.560 acres) 

Crop residue (1.446 acres)' 

Rented pasture (3.887 acres) 10.52 10.52 

Public grazing (1.639 A.M.) 3.13 3.13 

Hay (1.475 tons) 38.72 6.77 45.49 

Silage (0.566 ton) 4.05 1.74 5.79 

Grain and concentrate (0.800 cwt) 3.62 3.62 

Protein supplements (0.067 cwt) .52 .52 

Salt and minerals (0.360 cwt) 2.67 2.67 



3.37 
1.00 
12.41 
1.30 
1.16 
.17 
.86 



3.37 
1.00 
12.41 
1.30 
1.16 
.17 
.86 



Subtotal, feed. 



63.23 8.51 71.74 20.27 



20.27 



Veterinary and medicine 4.12 4.12 1.32 

Livestock hauling ^ 1.53 1.53 .49 

Marketing* 2.19 2.19 .70 

Fuel, lube, and electricity 9.76 9.76 3.13 

Machinery and building repair 11.84 11.84 3.79 



1.32 

.49 

.70 

3.13 

3.79 



Hired labor (2.36 hours) 8.31 8.31 2.66 2.66 

Interest on operating capital 6 2.30 .81 3.11 .74 .74 

General farm overhead 6.58 6.58 2.11 



Total direct costs 

OWNERSHIP COSTS 



109.86 9.32 119.18 33.10 35.21 



Machinery and equipment, RITI J" 1.50 19.89 

Buildings and facilities, RITI k> .88 13.84 

Livestock, RITI" 65.17 



21.39 
14.72 
65.17 



Total ownership costs 2. 38 

OTHER COSTS 

Operator and family labor (7.57 

hours)" 26.86 

Management 17. 31 

Land taxes 12.89 



98.90 101.28 



88.21 
21.70 



109. 91 



3.37 
1.00 
12.41 
1.30 
1.16 
.17 



20.27 



1.32 

.49 

.70 

3.13 

3.79 



Subtotal, other production items. 29.44 29.44 9.43 9.43 9.43 



2.66 

.74 

2.11 



35.21 



28 



26.86 8.61 

17.31 5.55 

12.89 4.13 4.13 



Total cash and noncash costs... 125. 13 152. 39 277. 52 

Total nonland costs "... 272. 52 

Returns to land and risk 65. 04 



33.10 ... 
33.10 



40. 10 14. 16 
54.26 



Non- 
cash » 



2.17 
.56 



2.73 



26 



2.99 



6.37 

4.44 

20.89 



31.70 



8.61 
5.55 



40. 10 48. 85 
88.95 
20.96 



Note: See table 1 for footnotes. 



50 



TABLE 26.-COSTS AND RETURNS OF COW-CALF ENTEPRISES, ALL SIZES, NORTH CENTRAL, 1979 • 
[Amount in dollarsl 





Costs and returns 
per cow 


Costs and returns per hundredweight feeder sold 3 

Supplementary Primary Primary 
enterprise, enterprise, enterprise, 
shortrun* shortrun* longrun* 


Item 2 


Cash 


Non- 
cash 


Total 


Non- 
Cash* cash 8 


Cash 8 


Non- 
cash 8 


Cash 8 


Non- 
cash * 


RETURNS (per cow) 
Feeder calves (1.706 cwt) 


. 150. 53 
. 96.96 
. 67.92 




150.53 
96.96 
67.92 


} 80.09 

21.98 


80. 09 
21.98 




80.09 . 
21. 98 . 




Feeder yearlings (1.386 cwt) 




Cull cows (1.312 cwt) 








Gross returns 


. 315. 41 




315.41 


102.07 


102.07 




102.07 . 








DIRECT COSTS (per cow) 

'mproved pasture (2.301 acres) 

Small grain pasture (0.017 acre) 

Native pasture (1.604 acres) 


. 32.53 

.33 

. 2.35 


16.02 
.17 
2.35 


48.55 
.50 
4.70 


10.53 

10 

.76 


10. 53 . 
.10 . 
.76 . 




10.53 
.10 
.76 


5.18 
.06 
.76 


Private range 




Crop residue (1.436 acres) 8 


Rented pasture 


Public grazing 


Hay (1.480 tons) 

Silage (0.581 ton) 


. 18.88 
4.44 

. 18. 30 
5.14 
5.96 


14.24 
3.63 


33.12 
8.07 

18.30 
5.14 
5.96 


6.11 

1.44 

5.92 

1.66 

1.93 


6.11 . 
1.44 . 

5.92 . 
1.66 . 

1.93 . 




6.11 
1.41 
5.9! . 
1.63 . 
1.9 .. 


4.61 
1.09 


Grain and concentrate (4.025 cwt) 

Protein supplements (0.532 cwt) 6 

Salt and minerals (0.719 cwt) 








Subtotal, feed . . 


87.93 


36.41 


124. 34 


28.45 


28.45 . 




28.45 


11.78 








Veterinary and medicine 

Livestock hauling 7 

Marketing 8 

Fuel, lube, and electricity 

Machinery and building repair 


4.29 

1.13 

2.30 

12.12 

21. 02 




4.29 

1.13 

2.30 

12.12 

21.02 


1.39 

.37 

.74 

3.92 

6.80 


1.39 . 

.37 . 

.74 . 
3.9? . 
6.80 . 




1.39 .. 
.37 .. 

.74 .. 
3.92 .. 
6. 80 .. 












Subtotal, other production items. 


40. 86 . 




40.86 


13.22 


13.22 . 




13.22 .. 








Hired labor (0.91 hour) . 


3.03 
5.67 
8.71 . 


"2.99" 


3.03 
8.66 
8.71 . 


.98 

1.84 


.98 . 
1.84 . 
2.82 . 




.98 .. 
1.84 
2.82 .. 




Interest on operating capital » 

General farm overhead .. . 




.97 












Total direct costs 


146. 20 


39.40 


185.60 


44.49 


47.31 . 




47.31 


12.75 






OWNERSHIP COSTS 
Machinery and equipment, RITI 10 


1.18 
2.50 


15.62 
39.21 
53.56 


16.80 . 
41.71 . 
53.56 . 




.38 . 
.81 . 




.38 
.81 


5.f6 


Buildings and facilities, RITI >o 

Livestock, RITI".. 




12.(9 
17.33 


Total ownership costs 


3.68 


108. 39 


112.07 . 




1.19 . 




1.19 


35 08 


OTHER COSTS 
Operator and family labor (12.13 


"20. 18". 


40.26 
23.66 


40.26 . 
23.66 . 
20. 18 . 






13.03 . 
7.66 . 


~~6."53\. 


13.03 


Management __ 






7.66 




6.53 . 












Total cash and noncash costs 
Total nonland costs"... 


170. 06 


211.71 


381. 77 
381. 77 
-66. 36 


44.49 

44.49 


55.03 

75.72 


20.69 


55.03 

123.55 
-21.48 


68.52 













Note: See table 1 for footnotes. 



51 

Feed costs 

Feed costs in terms of dollars per cow and as a percentage of total 
nonland costs are consistently higher in the Southeast, North Central, 
and West than in the Southwest or Great Plains (tables 12 to 26). Feed 
costs per cow are highest each year in the North Central region. Feed 
costs per hundredweight of feeder cattle sold are consistently highest in 
the Southeast, however, where the sale of lightweight feeder calves is 
most dominant and costs are spread over fewer pounds of production. 

Pasture production costs for 1977, 1978, and 1979 projections con- 
stituted 55 to 61 percent of total feed costs in the Southeast where 
relatively heavy applications of commercial fertilizers are required to 
maintain stands, yields, and the nutritive quality of desirable pasture 
grasses. The comparable proportions in the North Central region, 
where soils are generally more fertile and the grazing season is shorter, 
were 36 to 44 percent of total feed costs. Hay use and costs per cow 
were abnormally high in 1977 in both the Southeast and the North 
Central regions because of drought-reduced pasture yields, but were 
relatively greater in the North Central region where winters are longer 
and more severe. 

Hay costs in both dollar and percentage terms are usually greatest 
in the West where almost 2 tons per cow, much of it relatively expen- 
sive legume hay, are fed d iring a long non grazing season that extends 
from October into April in parts of the region. Les^ than 0.2 acre of 
improved pasture and 3.2 acres of rangeland owned by the operator 
were used per cow at an average cost of $12.41 in 1977. An average of 
2.4 animal months of public grazing, which cost only $3.62 per cow, 
and crop residues grazed from slightly less than three-quarters of an 
acre per cow provided the remaining forage supply in the West (table 
14). Hay costs of more than $83 per cow, however, caused total feed 
costs in the West to rank third below those in the North Central and 
Southeast regions, but considerably above the Southwest or Great 
Plains. 

The variety of grazing sources used in the Southwest reflects the 
diversity of operating conditions there. Less than two-thirds of 1 ton 
of hay is fed per cow. Even during the relatively short, mild winters, 
cattle are usually grazed on mature range grasses supplemented with 
commercial protein feeds. Grazing costs per cow are lower than in the 
Southeast, however, because operators of feeder-cattle enterprises in 
the Southwest rely mainly on their own rangeland, only a small portion 
of which is improved annually, and on rather inexpensive rented 
pastures and public lands. 

Feed costs per cow are usually lowest in the Great Plains where 
virtually no annual improvement practices are applied to the 10.5 
acres of operator-owned rangeland grazed per cow. Only rental costs, 
averaging $2.60 to $2.70 per acre, and public land grazing fees, costing 
less than $2 per animal month, contribute to grazing costs, which 
totaled less than $14 per cow in 1977, 1978, and projected for 1979. 
This compares to about $50 in the North Central region and up to $70 
in the Southeast (tables 12 to 26). 

Noncash costs 

The regional ranking of total noncash costs per cow in 1977, 1978, 
and projected for 1979 is almost the same as for average total cash 
costs — highest in the North Central region, followed by the Southeast, 



52 

and lowest in the Great Plains, but higher in the Southwest than in 
the West (tables 12 to 26). Noncash costs associated with forage 
production (included in feed costs) accounted for about 20 percent of 
the total noncash cost in the North Central region, 15 in the Southeast, 
and 10 percent or less in the other regions. Costs associated with 
operator and family labor in the various regions, reflecting differences 
in both regional farm wage rates and hours allocated per cow, were 
about $8 to $14 per cow greater in the North Central and Southeast 
than in the other three regions. This was at least partially due to the 
excessive labor use in small enterprises which are most dominant in 
the North Central and southeast regions. Management costs, another 
noncash category, were based on and, thus, varied with total nonland 
costs. 

Ownership costs 

Average investments per cow for machinery and equipment other 
than tractors and tracks vary substantially from region to region 
(table 5). Ownership costs of all machinery including tractors and 
trucks are much less variable, ranging from $10.95 per cow in the 
Southwest to $17.20 per cow in the Southeast in 1977 because either 
tractor or truck power was used for almost all mechanized tasks needed 
in the enterprise. 

Ownership costs per cow for buildings and facilities vsltv differently 
among regions than what the investment data might suggest. The 
average age of buildings and other permanent structures (such as silos, 
fences, and stock water ponds) varies regionally from 15 to 20 years, 
and permanent structures comprise a different proportion of total 
buildings and facilities investment per cow in each region. Ownership 
costs of buildings and facilities in 1977 ranged from $12.77 per cow 
in the Great Plains to $36.42 per cow in the North Central region 
(table 12 to 16). 

Ownership costs per cow for inventoried livestock added from $26.32 
to $33.82 to noncash costs in 1977. Livestock ownership costs generally 
are greater in the three western regions. Inventory values on the cow 
herd are higher there, and saddle horses used to inspect and move 
cattle over large areas of rangeland are included in livestock 
inventories. 

In summary, producers in the Great Plains, particularly, and the 
Southwest and West regions, generally, had lower production costs 
per cow and per hundredweight of feeder cattle sold in 1977 and in 
1978 than producers in the Southeast and North Central regions. 
Cost projections for 1979 indicate that this advantage may continue 
unless and until the costs of using private (owned or rented) or public 
rangelands increase more than the costs of using improved pasture. 



PRODUCTION COSTS OF STOCKER-FEEDER 
ENTERPRISES 



Cow-calf enterprises are important in most areas of the Nation. 
Cow-calf production in many areas, however, is limited by the fluctuat- 
ing supply of pasture and range available during the normal grazing 
season. Stocker-feeder enterprises are sometimes used in conjunction 
with beef-cow herds to utilize surplus seasonal grazing. Stocker-feeder 
production also occurs frequently as the sole beef-cattle enterprise in 
areas where grazing is heavily dependent on small-grain pasture, crop 
residues, or other highly seasonal pasture growth. 

Cattle growth is the major objective in stocker-feeder programs. 
Weaned calves are normally purchased at weights of 300 to 500 pounds, 
grown on pasture until available forage is grazed out, and then sold 
to feedlots. This type of enterprise is most common in the winter 
wheat belt of the Southwest and Great Plains where stockers can be 
grazed on wheat pasture for 3 to 5 months from late fall to early 
spring, depending on weather conditions, without reducing subsequent 
wheat yields. Cost estimates in this report are limited to stocker-feeder 
enterprises in this winter wheat area, referred to hereafter as the 
Southern Plains, which is centered in subregions SW-4, SW-5, SW-8, 
and GP-5 (fig. 1). 

HIGHLIGHTS 

Total nonland costs of stocker-feeder enterprises in the Southern 
Plains averaged $243.74 per stocker purchased in 1977 (table 27). 
Stockers, primarily steers, purchased in the fall of 1976 at an average 
weight of 4.15 hundredweight provided feeder-cattle sales that aver- 
aged 6.45 hundredweight per head purchased, after accounting for an 
average death loss of 3.2 percent. Thus, 1977 costs averaged $37.79 
per hundredweight of feeder cattle sold, about 18 percent more than the 
1976 cost estimate. This increase in costs, due largely to a 42-percent 
increase in the cost of stocker calves, from $109.84 per head in the fall 
of 1975 to $156.37 per head in 1976, was accompanied by essentially 
no change in gross returns. As a result, returns exceeded total nonland 
costs by only $4.43 per head in 1977, compared with $42.69 per feeder 
in 1976. 

(53) 



54 



TABLE 27.-COSTS AND RETURNS OF STOCKER-FEEDERENTERPRISES, ALL SIZES, SOUTHERN PLAINS, 1977 

[Amount in dollars] 





Costs a-nd returns 
per head purchased 

Non- 
Cash cash Total 


Costs and returns per hundredwei 

Supplementary Primary 
enterprise, enterprise, 
shortrun 4 shortrun 4 


ght feeder s 

Primal 
enterpri 
longrur 

Cash* 


old 3 

■y 
se, 

i 4 


Item 2 


Non- 
Cash* cash' 


Non- 
Cash* cash* 


Non- 
cash 


RETURNS (per head purchased) 
Feeder steers (6.046 cwt). 


234.77 
13.40 . 




234.77 
13.40 


36.40 

2.08 


36.40 

2.08 


36 40 




Feeder heifers (0.403 cwt) 


2 08 










Gross retu rns 


248. 17 . 




248. 17 


38.48 


38.48 


38.48 ... 




DIRECT COSTS (per head purchased) 
Stocker steers (3.902 cwt). 


148.85 . 
7.52 . 




148. 85 
7.52 


23.08 

1.16 


23.08 

1.16 


23.08 ... 
1.16 ... 




Stocker heifers (0.252 cwt) 








Subtotal stockers (4.154 cwt) «... 


156.37 . 




156.37 


24.24 


24.24 


24.24 ... 




Private range (0.400 acre) 

Crop residue (0.185 acre) ' 


.12 


0.08 


.20 


.02 


.02 


.02 


0.01 


Rented pasture (0.346 acre) . 


2.02 . 
6.79 . 
4.78 

.64 . 

.96 . 
5.24 . 

.61 . 


""."37" 


2.02 

6.79 

5.15 

.64 

.96 

5.24 

.61 


.31 

1.05 

.74 

.10 

.15 

.81 

.09 


.31 

1.05 

.74 

.10 

.15 

.81 

.09 


.31 ... 
1.05 




Small grain pasture (1.505 acres) 




Hay (0.112 ton) 


.74 

.10 ... 
.15 ... 
.81 ... 
.09 ... 


.06 


Silage (0.032 ton) 




Grain and concentrate (0.358 cwt) 

Protein supplements (0.747 cwt) 

Salt and minerals (0.169 cwt) 








Subtotal, feed 


21.16 


.45 


21.61 


3.28 


3.28 


3.28 ... 










Veterinary and medicine.. 


3.56 . 
2.99 . 
2.64 . 
3.47 . 
3.93 . 




3.56 
2.99 
2.64 
3.47 
3.93 


.55 

.46 

.41 

.54 

.61 


.55 

.46 

.41 

.54 

.61 


.55 ... 
.46 ... 
.41 ... 
.54 ... 
.61 ... 




Livestock hauling s 

Marketing 9 

Fuel, lube, and electricity 




Machinery and building repair .. 








Subtotal, other production items. 


16.59 . 




16.59 


2.57 


2.57 


2.57 ... 





Hired labor (1.58 hours) . 


4.26 . 
10.60 
2.47 . 


""62" 


4.26 
11.22 
2.47 . 


.66 

1.64 


.66 

1.64 

.38 


.66 ... 
1.64 
.38 ... 




1 nterest on operating capital ,0 

General farm overhead 


.10 








Total direct costs 


211.45 


1.07 


212. 52 


32.40 


32.78 


32.78 


.17 


OWNERSHIP COSTS 
Machinery and equipment, RITI n 


.32 
.54 


4.30 

8.53 

.26 


4.62 . 

9.07 . 

.26 . 




.05 

.08 


.05 
.08 


.67 


Buildings and facilities. RITI u 




1.32 


Livestock, RITI 12 




.04 


Total ownership costs 


.86 


13.09 


13.95 . 




.13 


.13 


2.03 








OTHER COSTS 
Operator and family labor (4.06 hours) 11 * 


""66". 


10.94 
5.67 


10.94 . 

5.67 . 

.66 . 




. 1.70 . 


""ii"... 


1 70 


Management 




.88 


88 


La nd taxes 




.11 








Total cash and noncash costs 

Total nonland costs 14 


212.97 


30.77 


243. 74 
243. 74 
4.43 . 


32.40 

32.40 


33. 02 2. 58 

35.60 


33.02 
37.79 
.69 


4.77 















1 Prices are averages received or paid by producers. See text for more complete information. 

2 Physical quantities per head purchased, where applicable, are shown in parentheses. 

s Sum of returns or designated costs per stocker purchased divided by the hundredweight of feeder animal sold per 
stocker purchased. 
4 See text for an explanation of the economic character of the enterprise and length of planning period. 

* Cash costs are the cash outlays for production items, the market values of readily salable items such as grains, and 
taxes, and insurance. Interest on direct expenses is apportioned between cash and noncash costs. Interest on all durable 
assets is listed as an opportunity cost, assuming full producer equity. 

8 Deduct stocker cost from total nonland cost and divide by the difference between feeder-cattle and stocker-calf 
weights to compute cost per pound of net gain after death losses. 

7 Only the costs of providing fencing and livestock water, if needed to graze crop residues, are charged to the stocker- 
feeder enterprise. These costs are included below in equipment operating and ownership costs. 

8 Costs are for custom hauling only. Producer-supplied hauling costs are included in labor and machinery operating 
and ownership costs. 

* Marketing costs reflect the extent to which producers utilize direct onfarm sales of feeder cattle. 

10 Interest is charged on the cost (or assigned value) of all direct inputs and arbitrarily divided between cash and 
noncash in proportion to their shares of total direct costs plus operator and family labor costs minus hauling and mar- 
keting fees. 

" Replacement reserve, interest, taxes, and insurance. Repairs are included above. 

12 Interest on saddle horses only. Interest on stocker purchasers is included in interest on operating capital. 

" Operator and family labor is valued at the hired labor wage rate. 

14 Costs that need to be covered to justify operation under the assumed situation. 



55 



TABLE 28.— COSTS AND RETURNS OF STOCKER-FEEDER ENTERPRISES, ALL SIZES, SOUTHERN PLAINS, 1978 1 

[Amount in dollars] 





Costs and returns 
per head purchased 

Non- 
Cash cash Total 


Costs and returns per hundredweight feeder sold * 




Supplementary 
enterprise, 
shortrun 4 


Primary 
enterprise, 
shortrun 4 


Primary 
enterprise, 
longrun 4 


Item 2 


Non- 
Cash s cash s 


Non- 
Cash s cash s 


Cash s 


Non- 
cash * 


RETURNS (per head purchased) 
Feeder steers (6.046 cwt) .. 


319.29 
18.62 




319.29 
18.62 


49.50 

2.89 


49.50 

2.89 


49.50 . 




Feeder heifers (0.403 cwt). 


2.89 










Gross returns 


337.91 . 




337.91 


52.39 


52.39 


52.39 ... 










DIRECT COSTS (per head purchased) 
Stocker steers (3.902 cwt) 


172.67 . 
8.50 . 




172.67 
8.50 


26.77 

1.32 


26.77 

1.32 


26.77 ... 




Stocker heifers (0.252 cwt) _. 


1.32 ... 








Subtotal stockers (4.154 cwt) 6 . 


181.17 . 




181.17 


28.09 


28.09 


28.09 ... 










Private range (0.400 acre) 


.13 


0.08 


.21 


.02 


.02 


.02 


0.01 


Crop residue (0.185 acre) 7 




Rented pasture (0.346 acre) 


1.94 . 
7.40 . 
4.97 

.52 . 

.99 . 
4.62 . 

.67 . 


""."39" 


1.94 

7.40 

5.36 

.52 

.99 

4.62 

.67 


.30 

1.15 

.77 

.08 

.15 

.72 

.10 


.30 

1.15 

.77 

.08 

.15 

.72 

.10 


.30 ... 
1.15 ... 
.77 
.08 




Small grain pasture (0.346 acre) 

Hay (0.112 ton) 


"766 


Silage (0.032 ton) . 




Grain and concentrate (0.358 cwt) 

Protein supplements (0.747 cwt) 

Salt and minerals (0.169 cwt) 


.15 ... 
.72 ... 
.10 ... 








Subtotal, feed 


21.24 


.47 


21.71 


3.29 


3.29 


3.29 


.07 


Veterinary and medicine. 


3.68 . 
3.11 . 
2.82 . 
3.62 . 
4.23 . 




3.68 
3.11 
2.82 
3.62 
4.23 


.57 

.48 

.44 

.56 

.66 


.57 

.48 

.44 _. 

.56 

.66 


.57 ... 

.48 ... 




Livestock hauling* 




Marketing 9 

Fuel, lube, and electricity 


.44 ... 
.56 ... 
.66 ... 




Machinery and building repair 










Subtotal, other production items. 


17.46 . 




17.46 


2.71 


2.71 


2.71 . 










Hired labor (1.58 hours) .. 


4.62 . 
13.09 
2.64 . 


"""776" 


4.62 
13.85 
2.64 . 


.72 

2.03 


.72 

2.03 

.41 


.72 ... 
2.03 
.41 ... 




Interest on operating capital 10 

General farm overhead 


.12 








Total direct costs 


240. 22 


1.23 


241.45 


36.84 


37.25 


37.25 


19 






OWNERSHIP COSTS 

Machinery and equipment, RITI » 

Buildings and facilities, RITI n 


.36 
.59 


4.83 

9.17 

.27 


5.19 . 

9.76 . 

.27 . 




.06 

.09 


.06 
.09 


.75 
1 4? 


Livestock, RITI 12 




.04 


Total, ownership costs .. 


.95 


14.27 


15.22 . 




.15 


.15 


? 1? 








OTHER COSTS 

Operator and family labor (4.06 
hours)' 3 . 


"""772". 


11.86 
6.72 


11.86 . 

6.72 . 

.72 . 




1.84 


ni" 


1 84 


Management 

Land taxes 




1.04 . 

.11 


1.04 






Total cash and noncash costs 

Total nonland costs 14 

Returns to land and risk 


241.89 


34.08 


275.97 
275.97 
61.94 . 


36.84 

36.84 


37.51 2.88 

40.39 


37.51 

42.79 
9.60 


5.28 















Note: See table 27 for footnotes. 



56 

An increase of $5.97 per hundredweight in the purchase price of 
stocker calves was the major cause of a 13-percent increase in total non- 
land production costs in 1978 over 1977 (table 28). The sale price of 
feeder cattle was $13.91 per hundredweight higher in 1978, however, 
yielding a return above total nonland costs of $61.94 per head, or 
$9.60 per hundredweight of feeder cattle sold. Projections indicate 
that the economic position of the average stocker-feeder operator will 
improve further in 1979, as projected sharp increases in feeder-cattle 
prices will more than offset the anticipated 47.5-percent increase in 
nonland production costs (table 29) . Stocker-calf costs will account for 
88 percent of the increase in nonland production costs, but the cost of 
every input except hay is projected to be greater in 1979 than in 1978. 
Returns in the average stocker-feeder enterprise are projected to 
exceed total nonland costs by about $110 per head in 1979. 

COMPOSITION OF COSTS 

Individual inputs are listed, described, and valued in the stocker- 
feeder cost tables so that the data can be adapted to a wide variety of 
production situations. Cash and, where applicable noncash compon- 
ents of the cost of individual inputs are listed and summed separately 
to emphasize the relationship between cash outlays normally required 
during each production period and other production planning 
situations. 

The two shortrun estimates of production costs apply to producers 
who already have the machinery and equipment, buildings and facili- 
ties, and livestock (saddle horses) used in stocker-feeder production. 
Ownership costs of these capital items cannot be affected by decisions 
regarding the size or even the inclusion of a stocker-feeder enterprise 
during the remaining useful life of the facilities; ownership costs are 
thus irrelevant for planning purposes. The only difference between the 
shortrun situations is the relative importance of the stocker-feeder 
enterprise as a source of operator income. Other farm or nonfarm 
sources are assumed to provide adequate income to cover operator 
living expenses, general farm overhead costs, and taxes on facilities 
and land in the supplementary enterprise example. Thus, anticipated 
returns of $32.40 or more per hundredweight of feeder cattle sold 
would have provided economic justification for operation of the enter- 
prise in 1977 (table 27). 



57 



TABLE 29.-COSTSAND RETURNS OF STOCKER-FEEDER ENTERPRISES, ALL SIZES, SOUTHERN PLAINS, 1979 ■ 

[Amount in dollars] 





Costs and returns 
per head purchased 

Non- 
Cash cash Total 


Costs and returns per hundredweight feeder sold J 




Supplementary 
enterprise, 
shortrun * 


Primary 
enterprise, 
shortrun * 


Primar) 
enterpris 
longrun * 

Cash • 1 


r 

e, 


Item » 


Non- 
Cash » cash s 


Non- 
Cash * cash 5 


Non- 
:ash 


RETURNS (per head purchased) 
Feeder steers (6.046 cwt) 


488.51 . 
28.49 . 




488. 51 
28.49 


75.74 

4.41 


75.74 

4.41 


75.74 ... 
4.41 ... 




Feeder heifers (0.403 cwt) 










Gross returns 


517.00 . 




517.00 


80.15 


80.15 


80.15 ... 




DIRECT COSTS (per head purchased) 
Stocker steers (3.902 cwt) 


281.72 . 
15.31 . 




281.72 
15.31 


43.68 „ 

2.37 


43.68 

2.37 


43.69 ... 




Stocker heifers (0.252 cwt).. 


2.37 ... 








Subtotal stockers (4.154 cwt) «.. 


297.03 . 




297.03 


46.05 


46.05 


46.05 ... 




Private range (0.400 acre) 

Crop residue (0.185 acre) 7 


.14 


0.09 


.23 


.02 


.02 


.02 


0.01 


Rented pasture (0.346 acre) 


2.04 . 
7.88 . 
4.83 

.54 . 
1.00 . 
4.81 . 

.73 . 


........ 


2.04 
7.88 
5.25 

.54 
1.00 
4.81 

.73 


.32 

1.22 

.75 

.08 

.16 

.75 

.11 


.32 

1.22 

.75 

.08 

.16 

.75 

.11 


.32 ... 
1.22 ... 
.75 

.08 ... 
.16 ... 
.75 ... 
.11 ... 




Small grain pasture (1.505 acres) 

Hay (0.112 ton) 


'""f)7 


Silage (0.032 ton) 




Grain and concentrate (0.358 cwt) 

Protein supplements (0.747 cwt) 

Salt and minerals (0.169 cwt) 








Subtotal, feed 


21.97 


.51 


22.48 


3.41 


3.41 


3.41 


.08 


Veterinary and medicine 

Livestock hauling » 

Marketing' 

Fuel, lube, and electricity 


3.87 . 
3.27 . 
3.00 . 
3.84 . 
4.53 . 




3.87 
3.27 
3.00 
3.84 
4.53 


.60 

.51 

.46 

.60 

.70 


.60 

.51 

.46 

.60 

.70 


.60 ... 
.51 ... 
.46 ... 
.60 ... 
.70 ... 




Machinery and building repair 




Subtotal, other production items. 


18.51 . 




18.51 


2.87 


2.87 


2.87 ... 








Hired labor (1.58 hours) 


4.90 . 
21.04 
2.80 . 


....... 


4.90 
21.83 
2.80 . 


.76 

3.26 


.76 

3.26 

.43 


.76 ... 
3.26 
.43 ... 




Interest on operating capital 10 

General farm overhead 


.12 








Total direct costs. 


366. 25 


1.30 


367. 55 


56.35 


56.78 


56.78 


?n 






OWNERSHIP COSTS 

Machinery and equipment, RITI u 

Buildings and facilities, RITI " 


.53 
.63 


7.04 
9.88 
.29 


7.57 . 

10.51 

.29 




.08 

.10 


.08 
.10 


1 09 




1 «rt 


Livestock, RITI 12 




.05 


Total ownership costs 


1.16 


17.21 


18.37 . 




.18 


.18 


? 67 








OTHER COSTS 

Operator and family labor (4.06 
hours) 13 


""."78". 


12.58 
7.75 


12.58 . 

7.75 . 

.78 . 




1.95 


'"."If— 


1 95 


Management 




1.20 


1 ?n 


Land taxes 




.12 








Total cash and noncash costs. .. 

Total nonland costs 14 

Returns to land and risk 


368. 19 


38.84 


407. 03 
407.03 
109.97 . 


56.35 

56.35 


57.08 3.15 
60.23 


57.08 
63.10 
17.05 


6.02 















Note: See table 27 for footnotes. 



58 

At least an additional $3.20 per hundredweight would have been 
needed to cover all cash costs and provide estimated market rates of 
return to management and labor supplied by the operator and his 
family (primary enterprise, short run). That is anticipated returns of 
more than $35.60 per hundredweight would have been required in 1977 
for the operator to derive a significant part of living expenses from 
labor and management devoted to the stocker-feeder enterprise. 

All noncash ownership costs, including replacement reserve (in lieu 
of depreciation) and interest on investment in capital assets must be 
covered by enterprise returns if stocker-feeder production is to continue 
to provide a livelihood for the operator year after year. Returns in 1977 
of less than $37.79 per hundredweight would have diminished the 
reserve eventually needed to replace worn-out machinery and facilities 
(table 27). In longrun planning, all costs must be considered variable 
and relevant. 

Most of the machinery ownership costs shown in tables 27 to 29 are 
for tractors and pickup trucks which are used principally in wheat and 
grain sorghum production. Very little specialized machinery is used in 
stocker-feeder production. Livestock trailers or sprayers are owned by 
some producers, but added less than $1 to machinery investment per 
head in stocker-feeder enterprises in 1977. Fences, corrals, feed bunks, 
and watering facilities are the major facilities used b} r the average 
stocker-feeder producer that are not generally available on all Southern 
Plains wheat farms, however hay and machinery storage sheds are also 
charged to the cattle, even though other enterprises may share the use 
of these buildings. Total investment in buildings and facilities averaged 
about $65 per head in 1977. 

Investment requirements are relatively low, but stocker-feeder pro- 
duction is considered a risky enterprise because of the timing of produc- 
tion expenses and the volatility of product prices. Cash outlays consti- 
tuted more than 87 percent of total nonland production costs during 
1977 and 1978. The costs of stocker calves alone accounted for about 65 
percent of total nonland costs (tables 27 and 28). Net returns are quite 
favorable when feeder-cattle prices in the spring are higher than 
stocker-calf prices the preceding fall, as was the case for cattle sold in 
1977, 1978, and projected for 1979. However, rapid declines in feeder 
cattle prices, which are not uncommon (table 4), can also create large 
and unavoidable losses. 

Feeds represented the second largest category (after stocker calves) 
of stocker-ieeder costs. Vi'ed costs represented about 9 percent of total 
nonland costs in 1977, and less than 8 percent in 1978 (tables 27 and 
28). The sources and costing methods for grazed feeds help to keep 
these costs low. Pasture in small grain is charged at the rates that could 
have been earned by the producer by leasing out the pasture for 



59 

grazing, and area average rates are charged for rented pasture. How- 
ever, only annual improvement costs are included for grazed range 
owned by the operator, and no charge is assessed for grazing sorghum 
stubble after the sorghum has been harvested for grain. 

Stocker-feeder enterprises have low land charges as well, because 
most of the land grazed is used primarily to produce wheat or grain 
sorghum. Real estate taxes assessed on the 0.4 acre of operator-owned 
rangeland used per stocker amounted to only 66 cents per head in 
1977 (table 27). This acreage had an estimated acquisition value 
(1942-76) of $44 (table 30). Interest on this land investment would 
have amounted to $2.31 per stocker in 1977 at the average interest 
rate charged by the Federal land bank in the region during the 
1942-76 average acquisition period for farmland. At the 1977 average 
land value of $151 per stocker, interest on land investment would 
have averaged $12.32 per stocker. Thus, the average stocker-feeder 
enterprise in 1978 netted almost $50 per stocker purchased over all 
costs, including interest on current land value (table 28). 

EFFECT OF ENTERPRISE SIZE OX UNIT COSTS 

Total nonland costs averaged $37.79 per hundredweight of feeder 
cattle sold in 1977 in stocker-feeder enterprises of all sizes combined 
(table 27) ; the larger the enterprise, the lower the cost per hundred- 
weight. Total nonland costs were $40.66 per hundredweight in enter- 
prises with 200 to 499 head (table 31), $37.67 in enterprises with 500 
to 999 head (table 32), and $32.65 in enterprises with 1,000 head or 
more (table 33). Differences in operating practices and in herd size 
are reflected in these production cost differences. For example, about 
one-fifth of the stocker calves purchased by operators with 200 to 499 
head were heifers, while only steer calves were purchased by the two 
larger enterprises. Stocker calves purchased by producers with herds 
of 500 to 999 head were lighter than calves purchased by either the 
smaller or the larger herd sizes, and average weight gains were greater 
in the middle-size enterprises. 



TABLE 30.— UNALLOCATED LAND CHARGE ALTERNATIVES, STOCKER-FEEDER ENTERPRISES, 1977 I 


Owned 

acres 

per stocker 

Acquisition date (acres) 


Land 

value 

per stocker 


Federal — 
land bank 
rate 
(percent) 


Land charge 

Per hundred 

Per weight feeder 

stocker sold 


1942-76 ... .... 0.4 


$44 
99 
151 


2 5.26 

2 7.86 

8.16 


$2. 31 $0. 36 


1972-76 . 4 


7.78 1.21 


1977 . 4 


12.32 1.91 



1 Interest on investment on land used in and owned by the stocker-feeder operation. Use of rented private land and land 
in wheat which was grazed but later harvested for grain are included in direct costs in the enterprise budget. 

2 Regional interest rates for the 1942-76 and 1972-76 periods are computed by multiplying the 1977 Southern Plains rate 
by all the regions ratios of 1977 to the earlier period rates. 



60 

TABLE 31— COSTS AND RETURNS OF STOCKER-FEEDER ENTERPRISES, 200 TO 499 HEAD, SOUTHERN PLAINS, 1977 

[Amount in dollars] 



Costs and returns 
per head purchased 



Item 2 



Cash 



Non- 
cash 



Costs and returns per hundredweight feeder sold * 



Supplementary 
enterprise, 
shortrun* 



Total Cash « 



Non- 
cash* 



Primary 
enterprise, 
shortrun 4 



Cash* 



Non- 
cash 5 



Primary 
enterprise, 
longrun* 



Cash 



Non- 
cash i 



RETURNS (per head purchased) 

Feeder steers (5.060 cwt) 197. 82 

Feeder heifers (1.291 cwt) 42.91 



Gross returns 

DIRECT COSTS (per head purchased) 



197. 82 
42.91 



39.03 
33.21 



39.09 39.09 

33.24 33.24 



Stocker steers (3.404 cwt) 

Stocker heifers (0.806 cwt) . 21.03 



Subtotal stockeis (4.210 cwt)« 



. 240.73 ... 


210.73 


37.91 .... 


.... 37.91 


.. 37.91 


. 131.16 ... 
. 21.03 .._. 


131.16 

24.03 


20.66 .... 
3.79 


.... 20.66 

.... 3.79 


.. 20.63 

.. 3.79 


. 155.24 ... 


155.24 


24.45 .... 


.... 24.45 


.. 24.45 



13 



0.10 



.23 



Private range (0.258 acre) 

Crop residue (0.153 acre) 7 

Rented pasture (0.382 acre) 1.92 1.92 

Small grain pasture (2.136 acres) 9.09 9.09 

Hay (0.120 ton) 5.66 .30 5.96 

Silage (0.102 ton) 2.05 2.05 

Grain and concentrate (0.348 cwt) .94 .94 

Protein supplements (0.783 cwt) 5.48 5.48 

Salt and minerals (0.179 cwt) .65 .65 



02 



.02 



.02 



.30 
1.43 
.89 
.33 
.15 
.86 
.10 



.30 
1.43 
.89 
.33 
.15 
.86 
.10 



.30 
1.43 
.89 
.33 
.15 
.86 
.10 



Subtotal, feed 25.92 



40 26.32 4.03 ... 



4.03 



Veterinary and medicine 4.14 4.14 .65 

Livestock hauling* 3.13 3.13 .49 

Marketings 3.39 3.39 .51 

Fuel, lube, and electricity 4.42 4.42 .70 

Machinery and building repair 4.97 4.97 .78 



.65 
.49 
.51 
.70 
.78 



.65 
.49 
.51 
.70 

.78 



Subtotal, other production items. 20.05 20.05 3.16 3.16 



3.16 



Hired labor (1.38 hours) 3.72 3.72 

Interest on operating capital 10 11.47 .77 12.21 

General farm overhead 2.87 2.87 



.53 
1.81 



.58 
1.81 
.45 



.53 
1.81 
.45 



Total direct costs 

OWNERSHIP COSTS 



Operator and family labor (4.83 

hours) i3 13.02 

Management . 6.72 

Landtaxes .27 



13.02 
6.72 
.27 



01 



Total cash and noncash costs 220.61 37.55 253.19 

Total nonland costs u .253.19 

Return to land and risk -17.46 



34.03 



34. 



31.75 3.11 
37.86 



0.01 



05 



06 



219.27 1.17 220.44 34.03 34.51 34.53 



18 



Machinery and equipment, RITI "... 

Buildings and facilities, RITI » 

Livestock RITI 12 


.39 

.71 


5.20 

11.10 

.34 


5.59 

11.81 

.34 


.06 

.11 


.06 
.11 


.82 
1.75 








Total, ownership costs 


.. 1.10 


16.64 


17.74 


.17 


.17 


2.62 


OTHER COSTS 















2.05 „ 




2.05 


. 1.06 . 


76f. 


1.06 



31.75 5.91 

40.66 
-2.75 



Note: See table 27 for footnotes. 



61 

TABLE 32— COSTS AND RETURNS OF STOCKER-FEEDER ENTERPRISES 500 TO 999 HEAD, SOUTHERN PLAINS, 1977 1 

[Amount in dollars] 



Item 2 



Costs and returns 
per head purchased 



Cash 



Non- 
cash 



Costs and returns per hundredweight feeder sold 3 



Supplementary 
enterprise, 
shortrun* 



Total Cash* 



Non- 
cash 8 



Primary 
enterprise, 
shortrun* 



Cash 



Non- 
cash* 



Primary 
enterprise, 
longrun* 



Cash 



Non- 
cash* 



RETURNS (per head purchased) 

Feeder steers (6.390 cwt) 

Gross returns 

DIRECT COSTS (per head purchased) 
Stocker steers (3.957 cwt) 

Subtotal, stockers (3.957 cwt) 6 



247.74 247.74 38.77 38.77 



16 



0.03 



25 



Private range (0.593 acre) 

Crop residue (0.160 ace) 7 ... 

Rented pasture (0.422 acre) 2.63 2.63 

Small grain pasture (1.285 acres) 5.39 5.39 

Hay (0.127 ton) 4.94 .51 5.45 

Silage. 



03 ... 



03 



38.77 



. 247.74 .... 


.... 247.74 


38.77 


.... 38.77 .... 


.... 38.77 


. 152.34 .... 


.... 152.34 


23.84 


.... 23.84 .... 


.... 23.84 


. 152.34 .... 


.... 152.34 


23.84 .... 


.... 23.84 .... 


.... 23.84 



03 



.41 
.84 
.77 



0.01 



Grain and concentrate (0.376 cwt) 1.01 1.01 .16 

Protein supplements (C.933 cwt) 6.51 6.51 1.02 

Salt and minerals (0.174 cwt) .63 .63 .10 



Subtotal, feed 21.30 



60 21. 90 



Veterinary and medicine 3.53 3.53 .55 

Livestock hauling s 3.12 3.12 .49 

Marketings 2.65 2.65 .41 

Fuel, lube, and electricity 3.28 3.28 .51 

Machinery and building repair 3.80 3.80 .60 



Hired labor (1.44 hours) 3.96 3.96 

Interest on operating capital' 10.17 .69 10.86 

General farm overhead 2.51 2.51 



.62 
1.53 



Total direct costs 206.66 

OWNERSHIP COSTS 



Machinery and equipment, RITI " .32 

Buildings and facilities, RITI u . 53 

Livestock, RITI 12 



4.30 

8.29 

.25 



4.62 

8.82 

.25 



85 12.84 13.69 



.16 

1.02 

.10 



3.33 



3.33 



.53 
.49 
.41 
.51 
.60 



.62 

1.59 

.40 



1.29 207.95 31.94 32.34 



05 



.16 

1.02 

.10 



3.33 



Subtotal, other production items. 16.38 16.38 2.56 2.56 2.56 



.62 

1.5) 

.40 



32.34 



Total, ownership costs 

OTHER COSTS 

Operator and family labor (4.48 

hours)' 3 12.29 12.29 1.93 

Management 5.71 5.71 .90 

Landtaxes 1.06 1.06 .17 .17 



09 



.11 



20 



.05 .67 
.08 1.30 
.04 



2.01 



1.93 
.90 



Total cash and noncash costs... 208. 57 32.13 240.70 

Total nonland costs'* 210.70 

Returns to land and risk 7. 04 



31.94 



31.94 



32. 64 2. 83 
35.47 



32. 64 5. 03 
37.67 
1.10 



Note: See table 27 for footnotes. 



62 

TABLE 33.— COSTS AND RETURNS OF STOCKER-FEEDER ENTERPRISES, 1,000 HEAD OR MORE, SOUTHERN PLAINS, 

19771 

(Amount in dollars] 



Costs and returns per hundredweight feeder sold 3 



Costs and returns 
per head purchased 



Supplementary 
enterprise, 
shortrun* 



Primary 
enterprise, 
shortrun 4 



Primary 
enterprise, 
longrun* 



Item 2 



Cash 



Non- 
cash 



Total Cash 



Non- 
cash* 



Cash* 



Non- 
cash* 



Cash» 



RETURNS (per head purchased) 
Feeder steers (6.874 cwt) 265. 34 



265.34 38.60 38.60 



38.60 



Gross returns 265.34 

DIRECT COSTS (per head purchased) 



265. 34 38. 60 



38.60 38.60 



173.33 25.22 25.22 



Stocker steers (4.75 cwt) 173.33 ... 

Subtotal, stockers (4.75 cwt) «.. 173.33 173.33 25.22 25.22 



25.22 



25.22 



Private range 

Crop residue (0.343 acre) 7 

Rented pasture 

Small grain pasture (0.982 acre) 7.00 7.00 

Hay (0.047 ton) 2.37 2.37 

Silage. 



1.02 
.34 



1.02 
.34 



1.02 
.34 



Non- 
cash * 



Grain and concentrate (0.314 cwt). 
Protein supplements 

Salt and minerals (0.125 cwt) 



84 



12 



.12 



Subtotal, feed 10.66 



.45 


.45 


.07 


.07 


.07 


. 10.66 


.... 10.66 


1.55 


... 1.55 


... 1.55 



Veterinary and medicine 2.45 2.45 

Livestock hauling « 2.18. 2.18 

Marketing' 1.05 1.05 

Fuel, lube, and electricity 2.20 2.20 

Machinery and building repair 2.24 2.24 



.36 
.32 
.15 
.32 
.32 



.36 
.32 
.15 
.32 
.32 



.36 
.32 
.15 
.32 
.32 



Subtotal, other production items. 10. 12 



10.12 1.47 ... 



47 1.47 



Hired labor (1.81 hours) 4.36 4.36 

Interest on operating capital io 10.19 0.20 10.39 

General farm overhead 1.45 1.45 



64 



.64 
1.48 
.21 



Total direct costs 210. 11 

OWNERSHIP COSTS 

Machinery and equipment, RITI " .18 

Buildings and facilities, RITI » . 25 

Livestock, RITI 12 



20 210.31 30.36 30.57 



30.57 



2.42 
3.96 
.13 



2.60 
4.21 
.13 



Total ownership costs. 
OTHER COSTS 
Operator and family labor (1.59 



43 



6. 51 6. 94 



06 



.06 



0.03 



03 



95 







3.83 
3.34 


3.83 . 
3.34 . 




0.56 


.56 


Management 




.48 . 


.48 
















Total cash and noncash costs _ 
Total nonland costs i*. 


. 210. 54 


13.88 


224. 42 

224. 42 
40.92 . 


30.36 

30.36 


30. 63 1. 04 

31.67 


30. 63 2. 02 

32.65 
5.95 












Note: See table 27 for footnotes. 



Due to such differences, a more meaningful unit for comparison 
among enterprises of different size is the cost of the weight gained per 
head rather than the cost of the weight sold per head. Total nonland 
costs per hundredweight gained are computed by deducting stocker- 
ealf costs from total costs and dividing by the difference between 
stocker-calf and feeder-cattle weights. Total nonland costs per 
bundled weight gained in 1977 were $24.05 in enterprises with 1,000 
head or more, $36.32 in enterprises with 500 to 999 head, and $48.08 in 
enterprises with 200 to 499 head. 



63 

Feed costs, at $5.02 per hundredweight gained, represented about 
one-fifth of the total cost of gain in the largest operations; at $9 and 
$12.30 per hundredweight gained in the middle size and small 
enterprises, respectively, feed accounted for one-fourth of total costs 
of gain. Part of the reason for this difference is that in the largest 
herds stockers were provided with more than twice as much costless 
crop residue acreage and less than 40 percent as much hay as cattle 
in either of the smaller herd sizes. 

Use of machinery and equipment as well as buildings and facilities 
was more efficient as the enterprise size increased, as indicated by 
both cash fuel and repair costs and noncash ownership costs per 
hundredweight gained. Operator and family labor and management 
charges, however, were the noncash costs that declined most with 
increases in enterprise size, falling from $9.22 per hundredweight 
gained in stocker-feeder operations with 200 to 499 cattle to $3.38 in 
enterprises with 1,000 or more stockers. 

The methods used to value labor and management implicitly assume 
that the quality of family labor and management is as high in the 
smallest as in the largest enterprises. To the extent that labor or 
management quality tends to be higher in larger operations, economies 
of size associated with these inputs are overestimated. On the other 
hand, economies of size may be understated in this analysis because 
it does not consider quantity discounts in the prices of purchased in- 
puts. Data needed to evaluate these potential influences on average 
production costs by size of enterprises are not available, but their 
effects would at least be partially offsetting. Thus, average unit costs 
in 1977 may not have been only half as high in the largest as in the 
smallest enterprises studied, but there is little doubt that unit costs 
were progressively lower for the larger stocker-feeder operations. 

c 



UNIVERSITY OF FLORIDA 



3 1262 05940 8780